Category: News and Events

Via the Volokh Conspiracy:

Mario Rizzo and Gerald O’Driscoll point to dueling letters to the editor from 1932 in The London Times by John Maynard Keynes and F. A. Hayek on whether government spending can help cure contemporary economic woes. The letters, unearthed by Richard Ebeling, show that today’s debates over economic policy are, in many respects, a rerun of the debates of the 1930s.

Everything old is new again! Related: Fear the Boom and Bust

Blog author: jballor
Tuesday, July 6, 2010
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Some may recall that before BP’s recent disaster (public relations and otherwise), there was a period of rebranding the company from ‘British Petroleum’ to ‘Beyond Petroleum.’

Beyond Petroleum

I’ve long argued that the opportunities afforded us by the use of fossil fuels are best spent seeking long-term sustainable and reliable sources of energy. These sources must include, and indeed in the nearer term be largely based upon, nuclear energy.

Two recent items underscore this: 1) the question of waste and what to do about it (HT); and 2) what waste actually is and is not. Says Hillsdale College econ prof Gary Wolfram, “95 percent of the used nuclear fuel could be recycled.”

My commentary this week is a simple message about the importance of returning to our founding principles and embracing the liberty granted to all of us as Americans. Independence Day should always serve as a significant reminder of the freedom narrative of this country that has provided so many people with opportunities to flourish and live out their dreams:

America’s Destiny Must Be Freedom

Ralph Waldo Emerson described America as “the land that has never become, but is always in the act of becoming.” Many Americans don’t feel that way as pessimism has replaced a once vibrant optimism about the future. Economic malaise, crippling debt, and a mammoth oil gush in the Gulf Coast are daily reminders of seemingly unmovable obstacles.

Bob Herbert wrote a New York Times column echoing the sentiment of an aimless America titled “When Greatness Slips Away.” While many claim to have the answers to our economic woes and lack of confidence, we would do best to return to the principles of the Declaration of Independence, the American Founding, and our freedom narrative. In past crises, they have been sources of American endurance and strength. They can be again.

Those sacred words from the Declaration—“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness”—have been an inspiration to billions of people at home and abroad for centuries. Freedom from excessive centralization of power and the right of the citizenry to flourish without undue interference are hallmarks of what it means to be American. And while the federal government has used activism for good at times, most notably for securing civil rights in the American South, it is revealing itself more and more as the obstacle to progress.

Many in the academy and the modern left scoff at what they call the “Horatio Alger myth.” Alger wrote stories such as “Ragged Dick” and “Only an Irish Boy.” He told stories of poor children achieving the American dream through hard work, determination, and virtue. But Alger also depicted an important spiritual component to his impoverished characters. He gave them dignity and natural rights, just as our founding document did. His tales reflected the kind of egalitarianism that asserts that the value and dignity of a destitute human person is equal to that of another born into prominence and prosperity. These ideas grew right out of our religious heritage and founding.

But if Alger’s stories were not myths before, they will be soon. Future generations’ enjoyment of the liberty to flourish is in jeopardy. The Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, last week called the $13 trillion national debt the “biggest threat to our national security.” Annual interest on the national debt in 2012 will grow larger than the entire defense budget. Currently 43 cents of every federal dollar spent is borrowed.

This kind of dependency is antithetical to our tradition of self-reliance. Pick up any honest textbook about American history and the march of America is about freedom and opportunity. On the day of the invasion of the greatest army of liberation ever assembled, General Dwight D. Eisenhower told his armed forces “The eyes of the world are upon you. The hopes and prayers of liberty-loving people everywhere march with you.” These men are often called “The Greatest Generation.

Succeeding generations may call our own “the debt generation” as their dreams become enslaved to deficits so colossal that they sap their entrepreneurial spirit, savings, and earning potential.

Big government activists are already using the BP oil spill to double down on their claim that the federal government is too small, even while the federal response is crippled by a multilayered bureaucratic decision making process and excessive regulation. Others say the BP oil spill is the perfect sign that America’s economic and moral might has peaked.

In his 1993 Inaugural address, President Clinton said, “There is nothing wrong with America that cannot be cured by what is right with America.” It’s a simple yet profound point. Similarly, the primary reason Russell Kirk penned The Roots of American Order in 1974 was to remind his country of the moral bedrock at its base, and to thereby show the way to how it could maintain greatness. In the first chapter, Kirk quotes a passage from the book of Job saying if the nation lacks foundation and order “even the light is like darkness.”

As American citizens pontificate about the future of America this July 4th, they should ask themselves what they can do to curb the contraction of liberty and promote its expansion. It is the citizens, thankfully, who will decide America’s destiny.

Acton Research Director Samuel Gregg contributed the article here, one of two Acton commentaries published today. Sign up for the free, weekly email newsletter Acton News & Commentary to receive new essays, book announcements and the latest news about Acton events.

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Money, Deficits, and the Devil: A Cautionary Tale

By Samuel Gregg D.Phil.

Sometimes the best economists aren’t economists.

One of the most famous plays in Western history was penned by the German writer Johann Wolfgang von Goethe (1749-1832). His two-part drama, Faust, is considered one of the greatest works of German literature. This complicated and sometimes disturbing text tells the story of a young scholar, Faust, who enters into a pact with the devil, Mephistopheles. In return for Mephistopheles’ services to help him realize his ambitions, Faust wagers the devil his soul.

Throughout the play, Faust asks Mephistopheles to help him achieve several ostensibly good ends. But each time he summons up the devil’s power, Faust gets more than he bargains for. In one scene, for example, Faust finds himself living as the landlord of a prosperous estate. His tranquility is disturbed only by an elderly couple who holds a freehold enclave on Faust’s land. Faust asks Mephistopheles to displace them. The devil fulfils his request, but in a way unanticipated by Faust: the elderly couple’s house is incinerated and the couple murdered.

At the beginning of part two, however, the play makes a surprising excursion into economics. Accompanied by Mephistopheles, Faust attends the court of a ruler whose empire is facing financial ruin because of profligate government spending. Rather than urging the emperor to be more fiscally responsible, Mephistopheles—disguised, revealingly, as a court jester—suggests a different approach, one with disturbing parallels to our own age.

Noting that the empire’s currency is gold, Mephistopheles maintains there is surely plenty of undiscovered gold underneath the earth belonging to the emperor. Thus, he argues, the emperor can issue promissory notes for the value of this yet-to-be-found gold, thereby generating fresh monetary resources for the government and solving its debt problems.

Not surprisingly, the emperor and his treasurer are delighted with this idea. It means the monarch can avoid making hard economic choices while simultaneously providing the empire with desperately needed currency. Mephistopheles subsequently deluges the court with paper money, and Faust is praised by emperor and commoner alike.

The results, however, are not what are expected. First, the issuance of paper money does not solve the emperor’s spending problems. Instead the ruler and his court become even more extravagant, knowing they can always print more paper money to cover their ever-growing expenses. Second, the devil has subtly but fundamentally changed the basis of the empire’s currency. Instead of being rooted in the solidity offered by a tangible and valued asset, the currency is now based on flimsy paper promises. Thus long-term monetary stability and powerful restraints on extravagant government spending are sacrificed for short-term gain.

Goethe finished writing the second part of Faust in 1832. Modern economics was then only emerging from its infancy. Yet Goethe’s insights go to the heart of some of our most intractable long-term economic problems.

One concerns the impact of fiat money. Technically speaking, fiat money is a currency that a government declares to be legal tender, even though it has no intrinsic value. Throughout history, fiat money has been the exception rather than the rule. Most currencies have been based on physical commodities, particularly gold. By contrast fiat money is ultimately based upon enough people having faith that a given currency will be accepted for the purpose of economic transactions.

Such faith, however, is easily shaken. The euro’s recent tribulations are a good example of what happens when people begin losing their faith in a fiat currency. The expression “as good as gold” underscores the confidence people have always attached to commodity-backed currencies, especially in difficult economic times.

The second problem concerns the temptation faced by governments as they struggle to solve their deficit problems. In 2009, America’s federal government posted a $1.4 trillion deficit. That’s 10 percent of U.S gross domestic product, a level not witnessed since World War II. Given a choice between cutting spending, borrowing, or inflating the money-supply, the third option appeals to many politicians. Moreover, like Goethe’s emperor, it’s exactly what many Western governments did between 1945 and 1980: short-term relief was bought at the expense of long-term fiscal stability.

But perhaps the biggest lesson from Goethe’s Faust is that self-deception is intrinsic to all foolish acts. Whenever governments choose comforting economic illusions over difficult economic truths, then, like Mephistopheles, they will employ dubious means such as state-engineered inflation or public-sector indebtedness to make ill-conceived economic policies seem less burdensome to those who will in the long term eventually have to pay the price.

There is, some might say, something demonic about that.

Dr. Samuel Gregg is Research Director at the Acton Institute. He has authored several books including On Ordered Liberty, the prize-winning The Commercial Society, and Wilhelm Röpke’s Political Economy.


Daniel Mahoney, professor of political science at Assumption College and lecturer at this year’s Acton University, (find his lectures here) wrote an excellent review in City Journalof Thomas Sowell’s new book, Intellectuals and Society. Sowell argues against the hyper-rationalist tradition of modern intellectuals whose theories tend to be divorced from reality and hostile to tradition and what Michael Polanyi called “tacit knowledge” of everyday people. As Mahoney notes, this has been a recurring theme of Sowell’s work throughout the years beginning with his fine book A Conflict of Visions. Mahoney writes:

Sowell, it’s true, denies being an intellectual, and we must take him at his word. He renews the critique of “literary politics” first limned by Edmund Burke in Reflections on the Revolution in France and Alexis de Tocqueville in The Old Regime and the Revolution. Burke and Tocqueville both observed a new intellectual type: thinkers inebriated by revolution and the dream of a radically new social order, and dismissive of the inherited wisdom of the past. Burke and Tocqueville didn’t hesitate to denounce injustice when they saw it, whether British oppression of Indians and the Irish or chattel slavery in America. But their critiques drew on the best traditions of Western civilization. They avoided the “rationalist” illusion that the world could be created anew. In this spirit, Sowell refuses to judge ideas by their supposed good intentions, but rather by their effects on human beings.

Read the entire review here.

In a new column in the Detroit News, Rev. Robert A. Sirico warns of a “cultural shift which would reject Christian revelation’s role in the forming of American and Western civilization.”

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June 29, 2010

Don’t devalue Christian heritage

By Fr. Robert Sirico

A week or so ago I struck up a friendly conversation with a cleaning lady upon entering a hotel.

She right away asked me, “Did you hear the news of the statue of Christ being struck with lightning in Ohio?”

How could I avoid it? For some inexplicable reason the news of this “act of God” had attracted a great deal of attention. Why, I began to wonder, did this relatively marginal story gain so much press attention?

“Do you think it was a sign?” the lady asked.

“A sign of what?” I replied.

I thought of our conversation for the rest of the morning. I am not one given to “signs and wonders” to discern some kind of mystical revelation, though I grant there is plenty of historical precedent for such epiphanies. Yet, I could not get the image out of my mind and the fascination it held for so many.

It does not take the training of a professional sociologist to realize that a major cultural shift regarding faith, morals and the place of Christianity is under way in Western Civilization. And this has nothing, really, to do with some haphazard lightning strike in Ohio.

Consider the following, which is a mere sampling of recent efforts to undermine the place of faith in the public life of Western democracies:

– The European Union’s insistence that neither God nor the Christian Church be mentioned in its Constitution, despite the clear historical role belief in the form and the institution of the latter played in the formation of Europe.

— The litany (if you will excuse the pun) of coarse jokes, cheap shots and outright viciousness directed specifically at the person of Christ or the Christian faith on TV and which are passed over by the same people who would readily file hate crime charges against their promoters if addressed to any other religion.

— The subtle but clear shift in language away from “freedom of religion” to “freedom of worship” on the part of the current administration, retaining only one dimension of religion (worship) while setting the stage to curtail its public witness. It is freedom of religion, not merely worship that has been venerated since the American founding.

This is not mere paranoia. Numerous other examples exist, but these should be sufficient evidence of a trend that is attempting to foster an entire cultural shift which would reject Christian revelation’s role in the forming of American and Western civilization.

For secularists and some non-Christians this might seem a worthy undertaking. After all, they might reason, why do we need a religion to be telling us how to live our lives, much less a religion that makes a claim to truth? And what is truth anyway, they might ask, not even realizing they are echoing Pilate’s own question to Jesus on the eve of his crucifixion?

Yet, aside from the historical amnesia this would represent, there are several significant ramifications which might well ensue were a complete repudiation of Christianity achieved.

The very idea of limited government and hence tolerance (yes, tolerance, which is not to be confused with the relativism offered as a substitute) emerge from the Judeo-Christian view of the sovereignty of God in personal and social life, rather than the sovereignty of political elites.

The very juridical systems we have grown accustomed to — and have been the envy of the world — did not just appear; they unfolded from the logic of the biblical faith. So, too, with the scientific method which followed from the knowledge that, if things are ordered by a divine plan and we are made in the image of God, then the truth of the physical world is knowable to reason.

Christianity has endowed Western Civilization with a priceless heritage. To lose this to a mass amnesia in the culture, would be an inestimable loss to the sense of who we are as a people and to any real hope we might have of building a just and tolerant future.

A delegate at last week’s Uniting General Council of the World Communion of Reformed Churches held at Calvin College urged the newly formed group to consider moving its headquarters out of the Ecumenical Centre in Geneva. Citing the costs associated with travel to and from the Swiss city, as well as those incurred during visits to the headquarters, Rev. Wesley Granberg-Michaelson, general secretary of the Reformed Church in America, asked the WCRC to move its offices to the global south.

This would be a show of solidarity as well as of acknowledgment of the shifting movement of the center of global Christianity to the southern Hemisphere. According to ENI, Granberg-Michaelson “questioned how the Reformed grouping could talk of promoting global justice, when it had its headquarters in a place of ‘significant economic privilege.'”

There’s a lot going on in this call, and more than I can comment on here. But I will say that I think this is a move that ought to be considered, but not primarily for the reasons Granberg-Michaelson raises (although there are some valid concerns there as well).

In my recent book, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness, I argue that one of the distinctive features of the ecumenical movement over the last two decades or so is what I call the ecumenical-industrial complex, “in which the ecumenical movement is promoted, through the media and political engagement, as an end in itself rather than as a church in service to others.”

Anything that can serve to mitigate some of the group think that goes on in the Ecumenical Centre in Geneva is something to be applauded, I think.

Blog author: jballor
Monday, June 28, 2010
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Gizmodo has an intriguing post about attempts to regulate and even criminalize photography. As Wendy McIlroy reports, “In at least three states, it is now illegal to record any on-duty police officer.” She goes on to detail some of the exceptions and caveats, noting,

The legal justification for arresting the “shooter” rests on existing wiretapping or eavesdropping laws, with statutes against obstructing law enforcement sometimes cited. Illinois, Massachusetts, and Maryland are among the 12 states in which all parties must consent for a recording to be legal unless, as with TV news crews, it is obvious to all that recording is underway. Since the police do not consent, the camera-wielder can be arrested. Most all-party-consent states also include an exception for recording in public places where “no expectation of privacy exists” (Illinois does not) but in practice this exception is not being recognized.

It is simply amazing the level of accountability and transparency that can now be achieved because of technological advancement. Certainly the Founders didn’t imagine that video recordings would ever exist, much less become important sources of evidence in legal cases.

Are there any compelling reasons that the burden of proof should be on the photographer rather than the law enforcement officer in these kinds of situations? McIlroy continues, observing “recordings that are flattering to the police – an officer kissing a baby or rescuing a dog – will almost certainly not result in prosecution even if they are done without all-party consent. The only people who seem prone to prosecution are those who embarrass or confront the police, or who somehow challenge the law. If true, then the prosecutions are a form of social control to discourage criticism of the police or simple dissent.”

Merely using a camera certainly doesn’t entitle you to do anything you want and expect protection under the First Amendment. But in clearly non-aggressive instances, where police are acting in public and there is the clear potential for recorded data to be used as exculpatory or convicting evidence, the public’s right to accountability and transparency should be respected. Again, writes McIlroy, “Cameras have become the most effective weapon that ordinary people have to protect against and to expose police abuse. And the police want it to stop.”

It’s of course understandable why officers wouldn’t like being recorded, any more than the average person would like to be recorded when doing their jobs. But the job of a law enforcement official isn’t the same as that of an accountant, an editor, or a janitor. It’s a public service position, and one that acts officially and with government sanction in public.

Maybe in our technological age law enforcement officials should increasingly expect to be recorded. Or at least always act as if what they are doing is subject to public scrutiny.

At MercatorNet, Sheila Liaugminas looks at the bank regulation push — enshrined in another 2,000 page document that few of the legislators behind this effort will actually read. In “Social Order on the Surface” she recalls an Acton conference where she heard this from Rev. Robert A. Sirico:

Politicians are not our leaders in a rightly ordered society, they are our followers … Not all views of culture are equal. but we can’t engage socially on our disagreements because everything becomes political … There is no legislature that can govern the human heart … A correct understanding of who the human person is is important to social ordering. Man is prior to the state. You can’t have a ‘common good’ if the good of the individual is not taken into consideration first.

Liaugminas also links to Research Director Samuel Gregg’s recent journal article “Smith versus Keynes: Economics and Political Economy in the Post-Crisis Era” in the Harvard Journal of Law and Public Policy.

“Statism is expanding in the U.S. right now under the guise of ‘the common good,'” Laugminas said. “Acton is only one institute engaging the debate about how Washington is handling the moral and ‘economic dimension of human reality,’ but we’d better pay attention.”

Advancing the “common good” behind the banner of statism has turned out to be an exercise in reckless selfishness and rapidly advancing insecurity. Where the gospel of redistribution of wealth was advertised as a way to ensure social equality, it now threatens to impoverish great masses of those who bought into the glittering promises. And promises are still being made. Recall President Obama telling Joe the Plumber that “spreading the wealth around” would be good for everybody (see video above).

Culture matters, much more so than politics. In “End of the European Siesta?,” Guy Sorman on City Journal explains why the financial fix for Europe’s debt problems are really superficial and temporary. Europe, he contends, needs to throw off the socialist ideologies — now embedded in cultural attitudes — that are at odds with its founding free market philosophy.

… the European Union is based on a free market. It was so conceived in political philosophy and in economics, and the only possible way to govern it is in accordance with such economic freedom. Yet all the national governments, even those of the right, have in fact created gigantic welfare states inspired by socialist ideology.

The fact is that, at the origins of Europe, Jean Monnet, a Cognac entrepreneur with strong American connections, concluded that European governments had never succeeded and would never succeed in making Europe a zone of peace and prosperity. He thus replaced the diplomatic engine with an economic engine: free trade and the spirit of enterprise, he envisioned, would generate “concrete areas of solidarity” that would eliminate war and poverty.

The “fatal drift” away from economic freedom, Sorman explains, inevitably led to the EU project going off the rails. Is America headed down the same path? Is the culture of free enterprise, for so long integral to what it means to be an American, now in permanent decline? More from Sorman on Europe:

Unfortunately, the national governments thought it possible to reap the economic benefits of a free Europe and the electoral delights of socialism. By “socialism,” I mean the unlimited growth of the welfare state—the accumulation of entitlements and jobs protected by the state. This de facto socialism, this sedimentation of electoral promises and acquired rights, grew in Europe at a much faster rate than did the economy or the population. It could thus only be financed by loans, which seemed risk-free, since the euro appeared “strong.” The euro’s strength drove its holders into a frenzy: suddenly, anything could be bought on credit. The result was a remarkably homogeneous indebtedness in all the countries of Europe, on the order of 100 percent of national wealth—ranging between Germany’s 91 percent and the Greeks’ 133 percent (a relatively modest difference), all reflecting a common socialist drift. Germany, Greece, Spain, and France differ less in their levels of debt or modes of administration, which are in fact quite similar, than in their debtors’ capacities to repay. All European states are run socialist-style, in contradiction with the European Union’s free-market principles. Some will be more able than others to deal with defaults, but all have drifted off course.

How shall we explain this fatal drift? The true cause lies in ideology. Socialism dominates minds across Europe, whereas liberalism—which has retained its original free-market meaning in Europe—is under attack in the academy, in the media, and among intellectuals generally. In Europe, to support the market against the state, to recommend modesty on the part of the state, is taken for an “American” perversion. And socialist ideology is sufficiently engrained that it’s almost impossible for a non-suicidal politician to win election without promising still more public “solidarity” and still less individual risk. These welfare states, through their financial cost and the erosion of ethical responsibility that they foster, have smothered economic growth in Europe. We are the continent of decline, albeit decline with solidarity.

Christianity Today looks at the way the State Department has recently begun using the phrase “freedom of worship” instead of “freedom of religion.” The Obama Administration sees these phrases as more or less equivalent.

Secretary of State Hillary Clinton echoed the shift in language. In a December speech at Georgetown University, she used “freedom of worship” three times but “freedom of religion” not at all. While addressing senators in January, she referred to “freedom of worship” four times and “freedom of religion” once when quoting an earlier Obama speech.

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The State Department does acknowledge that worship is just one component of religion, said spokesperson Andy Laine. “However, the terms ‘freedom of religion’ and ‘freedom of worship’ have often been used interchangeably through U.S. history, and policymakers in this administration will sometimes do likewise.”

But “the softened message” is probably meant for the Muslim world, according to Carl Esbeck, professor of law at the University of Missouri. He told CT that Obama, “seeking to repair relations fractured by 9/11, is telling Islamic countries that America is not interfering with their internal matters.”

Reporter Sarah Eekhoff Zylstra also interviewed Nina Shea, director of the Center for Religious Freedom and a member of the U.S. Commission on International Religious Freedom. She sees something much more troubling about the “freedom of worship” language. (Read an interview with Shea in the current issue of Religion & Liberty).

Freedom of worship means the right to pray within the confines of a place of worship or to privately believe, said Nina Shea, director of the Center for Religious Freedom and member of the commission. “It excludes the right to raise your children in your faith; the right to have religious literature; the right to meet with co-religionists; the right to raise funds; the right to appoint or elect your religious leaders, and to carry out charitable activities, to evangelize, [and] to have religious education or seminary training.”

Read “Freedom of Worship’ Worries” on the Web site of Christianity Today.