Category: Business and Society

An snippet from Ecumenical News International:

Presbyterians invest $1 million in church ‘bank’ that helps poor

New York (ENI). The Presbyterian Church (USA) has invested US$1 million in Oikocredit, an organization established by the World Council of Churches that assists people in poor countries start small businesses. The investment is the largest in Oikocredit over more than a decade, the church announced earlier this week, making the 2.4-million-member US denomination the second-largest investor in the institution set up in 1975. The largest is the Church of Sweden.

I’ve looked a bit at the Oikocredit organization, and in generally this does not fit my normal expectations for an initiative by the left-leaning WCC. To be sure, Oikocredit does employ the rather vague criteria of “socially responsible investing” when deciding which groups to fund.

But in general, the microlending approach is much more economically viable and informed than many ecumenical attitudes towards global poverty. Started over thirty years ago, Oikocredit has a track record, and “was created for groups that need credit to develop their productive enterprises, but have difficulties receiving credit through conventional financial institutions, because they simply lack collateral.” For a personal story of how microloans can be a part of the solution (along with property rights, the rule of law, and so on), see this commentary by Rev. Jerry Zandstra.

Despite its shortcomings, Oikocredit on the whole is probably a good thing. And again, when compared to what you typically see from ecumenical groups, it’s positively refreshing.

Hunter Baker at The Reform Club passes along a column by Maggie Gallagher that has him “rethinking” his position concerning illegal immigration. Gallagher notes, “Economic studies suggest that overall, immigration is a net wash, or a slight plus, for the American economy. But the pluses and minuses are not evenly distributed over the whole population: Lesser-skilled Americans who compete for jobs that don’t require Ivy League credentials take the hit, while people like me enjoy a lot of the benefits.”

Andrew Yuengert, a professor of economics at Pepperdine University, in his Acton monograph on immigration, makes the same observation. In his shorter white paper based on the monograph, Yuengert writes regarding the impact of immigrants on the cost of social programs, “the real problem is not the fiscal burden of immigrants but the concentration of the fiscal burden in a few localities.”

Baker identifies with the problems posed for low-wage natives in the US who are faced with increasing competition from immigrant workers (both legal and illegal). It is true that certain areas of the country are going to be negatively impacted in terms of the costs of government programs, as well as that certain sectors of the population in these areas will face increased competition for low-wage jobs.

Neither of these two facts can obscure the reality that liberal and legal immigration results in a net economic gain for the US. What these realities can do, however, is temper and specialize government policy.

Perhaps even more importantly, they can give incentive and direction for private social endeavors to help alleviate the job displacement and negative economic effects. Charities could target immigrant communities and take the burden off the state to provide education and health care. Other programs could focus on training and education for immigrants and natives to move on from low-wage jobs.

Immigration should be seen as an opportunity and incentive for natives in low-wage earning jobs to get better training, experience, and education and improve to higher paying positions. A benefit of increased competition for jobs is that workers are given the incentive not to remain indefinitely in positions that don’t give them the standard of living they desire.

For Yuengert’s views especially as regards illegal immigration, listen to this radio interview (mp3) from The Jerry Bowyer Show.

Blog author: jballor
Friday, March 17, 2006
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A recent NBER working paper, “The Effects of Tort Reform on Medical Malpractice Insurers’ Ultimate Losses,” argues that “The long run effects of reforms are greater than insurers’ expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures.”

A number of the specific changes in the history of tort law are discussed in Ronald Rychlak’s Trial by Fury: Restoring the Common Good in Tort Litigation, part of Acton’s Christian Social Thought Series.

Rychlak argues that in addition to the tangible and significant economic impact of current tort law, the system also “encourages litigation at the expense of forgiveness and understanding. It ignores the role that family members, friends, religious leaders, and others can play in bringing about reconciliation.”

This is probably not the best move for a state that has been among the worst in the nation in terms of unemployment: “Lawmakers in the Michigan House of Representatives are preparing to vote on a proposed hike in the minimum wage to nearly $7 an hour.” The state Senate passed the measure late last week, so the House’s agreement would put the matter into the hands of Gov. Granholm.

According to the Office of Labor Market Information, Michigan’s unemployment rate for January was 6.2%, which puts it in a tie for fourth-worst in the nation. Believe it or not, this is a notable improvement for the state, which at various points in the previous two years had been at the top of the unemployment rankings, hovering around 7%. The national unemployment rate is 4.7%.

Blog author: jballor
Friday, March 10, 2006
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Seth Godin contends today that “most people don’t really care about price.” He uses a couple of arguments that involve aspects of convenience, and so he concludes, “price is a signal, a story, a situational decision that is never absolute. It’s just part of what goes into making a decision, no matter what we’re buying.”

He’s right, in the sense that everyone will not choose the service or item with the lower price at all times and in all places. But what he doesn’t make explicit is that convenience is taken into account in pricing, so that part of what price signals is the convenience factor.

And the convenience factor is really just about the personal valuation of time. And we all know, of course, that “time is money.” And that’s really what Seth’s examples prove.

In the Acton Commentary this week, Dr. Samuel Gregg examines the “Historic Catholic Statement of Principles” released by House Democrats last week. Following is a brief statement of purpose from the official press release:

…Signed by 55 House Democrats, the statement documents how their faith influences them as lawmakers, making clear their commitment to the basic principles at the heart of Catholic social teaching and their bearing on policy – whether it is increasing access to education for all or pressing for real health care reform, taking seriously the decision to go to war, or reducing poverty. Above all, the document expresses the signers’ commitment to the dignity of life and their belief that government has moral purpose.

Dr. Gregg looks at the statement and questions the legitimacy of claiming to promote the dignity of life while condoning abortion and embryonic stem-cell research. John Paul II wrote, “[i]t is impossible to further the common good without acknowledging and defending the right to life, upon which all the other inalienable rights of individuals are founded and from which they develop” (Evangelium Vitae no.101). How can you commit to furthering the dignity of life, embracing the social guidance of the Church, and then blatantly disregard this fundamental truth?

Read Dr. Gregg’s commentary here.

Blog author: jballor
Monday, March 6, 2006
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In her Townhall.com column this week, Dr. Jennifer Roback Morse, Acton senior fellow in economics, takes Linda Hirshman, a retired professor at Brandeis University, to task.

Hirshman has been making the news circuit touting her claims about negative trends among working women. She says that educated women who become stay at home moms will create the future result that “expensively educated, upper-class moms will be leading lesser lives.”

According to an ABC News article, Hirshman views this as “a tragedy not only for the mothers, but ultimately their children and women as a whole.”

Morse’s piece is a pretty direct point by point rebuttal of Hirshman’s claims, and it is worth reading in its entirety. She writes, “I learned from experience that the kinds of claims Hirshman makes are simply untrue.” Read the rest here: “A duel in the mommy wars.”

Washington lawmakers are falling all over themselves to pass legislation aimed at curbing corruption in high places. But, as Kevin Schmiesing points out, the most effective solution to the problem has been known for hundreds of years: limited government and moral restraint.

Read the full commentary here.

As America celebrates Black History Month, Anthony Bradley looks at the forces that threaten the very foundation of black society in this country. “Two aspects of pre-civil rights-era black history — strong men and strong families — will have to be recovered if we wish to have any black history in the future,” Bradley warns.

Read the full commentary here.

Blog author: jrichards
Wednesday, February 22, 2006
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Clive Cook has a terrific article in the March 2006 Atlantic Monthly that is worth reading in its entirety. But here’s my favorite paragraph:

What is most striking, so far as the movies’ treatment of capitalism goes, is not the hostility of films whose main purpose is actually to indict corporate wickedness (Wall Street, Erin Brockovich, A Civil Action, The Insider, The Constant Gardener, and so forth). It is the idea of routine, reckless corporate immorality—maintained as though this premise were inoffensive, uncontroversial, and hardly worthy of comment—that drives movies whose principal interest lies elsewhere, whether in the human drama of contemporary geopolitics (Syriana, to cite a recent instance), knockabout comedy (Fun with Dick & Jane), children’s fantasy (Charlie and the Chocolate Factory), star-crossed romance (In Good Company), or, classically, in some dystopian near or distant future (Alien, The Terminator, Blade Runner, Robocop, and many others).

The point is not that such movies, or the culture more generally, argue that capitalism is evil. Just the opposite: it is that they so often merely assume, innocently and expecting to arouse no skepticism, that capitalism is evil.

I’ve been compiling a list of popular movies in which the business entrepreneur is treated in a positive manner. It’s a very sparse list. One of the few I’ve thought of is Charlie and the Chocolate Factory. The fact that Cook cites it in his list illustrates that even this is an ambiguous example. There are bad-guy business people who want to steal Willie Wonka’s secrets, but at least in its most recent incarnation, with John Depp playing Willie Wonka, Wonka is portrayed as a good, if highly eccentric, entrepreneur. Perhaps this is the exception that proves the rule. When Hollywood occasionally portrays an entrepreneur positively, he must highly eccentric–that is, atypical.

I’m sure there are some exceptions to the Hollywood theme of business=evil, but I can’t think of any off the top of my head.