Category: Business and Society

Many are alarmed as Latin American countries such as Venezuela and Bolivia veer toward leftist class-struggle politics and socialist economic policies. But, as Sam Gregg points out, the potent combination of state-authoritarianism, populism, nationalism and xenophobia — or “corporatism” — seen today in Latin America was also present in European fascist governments in the 1930s, and later during the regime of Argentina’s Juan Peron. One encouraging sign: Catholic leaders are now speaking out against this corporatist agenda.

Read the complete commentary here.

As the immigration debate continues, commentators dig deeper in the search for the “sources of the problem.” Many have rightly pointed out that a healthier Mexican economy would alleviate the need that spurs many Mexicans to seek financial recourse across the border. Whatever one’s views on the current debate, we ought to be able to agree that a more prosperous Mexico would be beneficial for everyone. But then others have correctly noted that talk about the Mexican economy is really a diversion from the US immigration reform issue: We need to figure out what to do about the large number of illegal immigrants currently here regardless of what happens in the Mexican economy.

Nonetheless, for anyone concerned about Mexicans, Americans, and Mexican-Americans, the issue of the Mexican economy is an important one. And on that issue, William P. Kucewicz offers a helpful analysis at NRO. I wanted to focus on one extraordinary line at the end of the piece:

Another analysis found Mexico’s level of government corruption has the same negative effect on inward foreign direct investment as raising the marginal tax rate by 42 percentage points.

Sam Gregg and Osvaldo Schenone wrote a while back about the pernicious effects of corruption in their contribution to Acton’s Christian Social Thought Series. Kucewicz’s citation above dramatically illustrates the impact that moral turpitude can have on economic wellbeing. No single magic bullet can bring prosperity to Mexico or anywhere else, of course. But any progress down that road will have to involve coming to terms with corruption, the long arm of which erodes the common good in diverse and significant ways—among them compelling migrants to leave their homelands.

Andrew Yuengert, the author of Inhabiting the Land – The Case for the Right to Migrate, the Acton study on immigration, looks at the current debate and debunks some common misconceptions. “The biggest burdens from immigration are not economic – they are the turmoil caused by the large numbers of illegal immigrants,” Yuengert writes.

Read the complete commentary here.

Blog author: kschmiesing
Tuesday, May 2, 2006
By

Jordan pretty well covered the territory in his earlier post on gas prices. But with the silliness from both Republicans and Democrats ongoing, it can’t hurt to suggest two additional sensible treatments of the subject: Thomas Nugent on National Review Online, and Jerry Taylor of the Cato Institute on FoxNews.

Two Acton scholars, Andrew Yuengert and Fr. Paul Hartmann, were interviewed on “The World Over” (EWTN Studios) last Friday, April 28, about the Catholic response to immigration rights. Yuengert, author of the Acton monograph “Inhabiting the Land,” emphasizes the dignity of the human person as a foundation for looking at the issues surrounding immigration. Yuengert says that the “right to migrate” is not an absolute right, but to prevent people from assisting immigrants in need is immoral. Immigrants come because they want to work. They generally find positions as low-wage laborers, and tend to send large amounts of money home to poorer nations. The economic burdens that immigrant workers place on the United States are relatively small, although those burdens tend to fall heavily on specific regions, most noticeably on southern California. Yuengert says that the burdens themselves do not justify new restrictions on immigration although, viewed from an economic perspective, the nation could probably adjust to a massive loss of immigrant labor.

Fr. Hartmann reiterates the necessity of being allowed to provide charity to those in need. It becomes a major problem, however, if laws exist which make it a crime to extend a helping hand to immigrants and their families. The Church should oppose such laws, he says. What’s more, Christians have a moral obligation to “feed the hungry, give drink to the thirsty, and clothe the naked,” without prejudice.

Anthony Bradley, a research fellow at the Acton Institute, was interviewed on “Heartland with John Kasich” on Fox News last Saturday. He was talking about the need for a “hero to emerge” from the Duke lacrosse team in the wake of a sexual assault scandal. Bradley emphasizes the need for moral leadership in the United States as a whole and why we should discourage markets from promoting the dehumanization of women.

Bradley earned quite a bit of attention after writing a commentary last Wednesday bringing attention to what he calls the “cowardly and dehumanizing … commoditized sex-for-sale industry.” Bradley asserts that the United States, as a nation, should be “outraged that two adult women subjected themselves to voyeuristic, live pornography” in the first place.

Court TV Morning, a radio show aired on Sirius satellite network (Channel 110), has also invited Anthony Bradley to discuss his Duke lacrosse commentary on Wednesday, May 3, at 7:15 a.m. Eastern time.

For more information read Anthony’s commentary, “Wanted: A Duke Lacrosse Team Hero.”

Where in the world would you pay $145,750 for a roll of toilet paper? According to an article in the New York Times, inflation in Zimbabwe is soaring higher than ever — about 900 percent since President Mugabe began seizing land from wealthy landowners in 2000. And inflation is climbing at unparalleled rates.

What problems result from such rampant inflation? If inflation is climbing daily and you have $100 one day, it might be worth only $90 the next. People are spending any money that they have because whatever they buy will hold value better than cash. No money is being saved because the annual interest rates are between 4-10 percent; much less than the rates of inflation. And the government seems to think that printing more money will solve these problems.

These problems “began” when Mugabe started seizing land from wealthy white farmers in an attempt to redistribute the wealth among the native Zimbabwean population. The result, intentional or not, was that foreign investment was scared off for good. Zimbabwe’s now “solo” economy began to flounder with a lack of goods entering the market.

Let’s recap. Zimbabwe faces economic crisis (rated as a repressed economy by the Heritage Foundation, just above Burma, Iran, and North Korea) due to massive seizing of wealth and attempts at redistribution, restriction of free international trade, lack of foreign investment, and over-printing of new monies. What do you think would solve most of Zimbabwe’s economic problems? Perhaps some human dignity, some free trade, and a little less government involvement!

You may have heard about the debate in Washington that erupted late last week, as Senate Democrats and Republicans sought ways to respond to rising gas prices. According to Marketplace’s Hillary Wikai, the majority Republicans settled on “a $100 gas-tax rebate to be paid for by drilling in Alaska’s Wildlife Refuge.”

Michigan Democrat Debbie Stabenow proposed “a $500 rebate but pay for it by cutting the tax breaks for oil companies.” She said, “We should instead put that money back in the pockets of the people paying the high gas prices.” But one other Democratic plan was to stop taking that money from the people in the first place, at least temporarily.

The NYT reports that “Democrats were pushing for a 60-day suspension of the federal gas tax of 18.4 cents a gallon, and the Senate Republican leadership settled on the rebate.” The short-term nature of the proposed solutions lead many to suspect that any of the proposed moves are simply pandering to the voters in an important election year.

Indeed, Congress has good reason to distract us from the reality of the situation. As Benjamin Zycher comments (text here), “Oil industry earnings per gallon were about 19 cents in 2005, and have increased to about 23 cents more recently. Federal and state taxes per gallon of gasoline average 46 cents. And so by all means, yes: Let’s have a debate about who is profiteering from the gasoline market.”

Of the two options, clearly suspension of the tax is preferable to filtering money through the government bureaucracy and letting it trickle back to taxpayers. But why make it temporary? If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely? States could do the same, by the way.

Here are some of the reasons that even the 60-day relief plan was tanked, given by Congressional staffers:

Those leaders and Finance Committee aides said many Republicans opposed the Democratic plan because they feared that oil companies, which pay the gas tax, would not pass savings on to the public, or that the laws of supply and demand would push the price up again.

There was also the probable opposition of House Republicans, who have been reluctant to jeopardize the flow of the gas tax revenue to the highway trust fund that underwrites road and bridge projects.

“Our folks thought it might amount to nothing for consumers,” said one aide who was granted anonymity to discuss internal leadership deliberations.

The first excuse is really just quite lame. If increasing demand raises the prices further, they would still be lower than they would be if the 18.4 cent tax were still in place. The second paragraph really tells the tale. If Americans are addicted to oil, maybe politicians are addicted to taxes.

Instead of being worried that the move might “amount to nothing for consumers,” the politicians are clearly more worried that any move to cut taxes would “amount to nothing” in terms of spendable tax revenue.

Placing limits on the levels of government taxation of gasoline would be a much more substantial and effective move than attempts to set price controls, as advocated in an online petition introduced by Michigan Governor Jennifer Granholm.

According to MichiganGasPrices.com, Michigan gets nearly 20 cents (19.875) in tax revenue per gallon of gasoline sold, and this figure does not include the additional 6% sales tax that is tacked on.

Government leaders should never forget that they are entirely dependent on the productivity and labor of the nation’s citizens for their budgets. Their task is to responsibly and faithfully administer those funds, acting as stewards on behalf of the tax-payers. Attempts to point the blame for rising gas prices solely on oil companies, without acknowledging the basic role of rising demand and high levels of government taxation, is irresponsible and disingenuous.

Duke University is embroiled in a sensational scandal involving its lacrosse team and allegations of sexual assault of a stripper at a wild party. But, as Anthony Bradley points out, the case is really symptomatic of a much larger problem in American society. “Why is there no national outrage about the fact that two adult women subjected themselves to voyeuristic, live pornography?” he asks. “What kind of men do we raise in America that they would even want to hire a stripper?”

Read the full commentary here.

Blog author: jspalink
Thursday, April 13, 2006
By

When I was in college, living in the dorms, friends of mine would play a game called bigger and better. In this game, they would take an object–something that they owned–and trade it up for something that was worth a bit more to them, but worth a bit less to the person that they were trading with.

This is a perfect example of a market economy. You have something that you can trade, somebody else has something that they can trade, and both parties are better off for the transaction. My friends could go out with a pen and come home with a couch for the dorm. Don’t get me wrong, they weren’t always this successful. It usually involved a little bit of time, but it made for a fun Saturday afternoon.

Then I found this website, a blog, where a man documents his game of bigger-and-better. He started out with a little red paper-clip. Right now he’s looking to trade one year in Phoenix (which includes one year free rent in the heart of downtown Phoenix. [If needed, the apartment can also come fully furnished] and roundtrip airfare for two from any major airport in North America) for something bigger-and-better. His goal is to own a house at the end of his game.

A small example of how having something of little value to yourself doesn’t mean that you can’t leverage what you have on the market to find something of greater value to yourself.