Category: Public Policy

Fox News reports:

The nation’s poverty rate dropped last year, the first significant decline since President Bush took office. The Census Bureau reported Tuesday that 36.5 million Americans, or 12.3 percent — were living in poverty last year. That’s down from 12.6 percent in 2005. The median household income was $48,200, a slight increase from the previous year. But the number of people without health insurance also increased, to 47 million.

The last significant decline in the poverty rate came in 2000, during the Clinton administration. In 2005, the poverty rate dipped from 12.7 percent to 12.6 percent, but Census officials said that change was statistically insignificant.

The poverty numbers are good economic news at a time when financial markets have been rattled by a slumping housing market. However, the numbers released Tuesday represent economic conditions from a year ago.

The poverty level is the official measure used to decide eligibility for federal health, housing, nutrition and child care benefits. It differs by family size and makeup. For a family of four with two children, for example, the poverty level is $20,444. The poverty rate — the percentage of people living below poverty — helps shape the debate on the health of the nation’s economy.

Robert Rector, of the Heritage Foundation, reminds us of what it means to live as “the poor” in America:

The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:

* Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

* Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.

* Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.

* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

* Nearly three-quarters of poor households own a car; 30 percent own two or more cars.

* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

* Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

Important items to remember:

(1) Those living “in poverty” is never a static population. People cycle in and out of poverty over time.
(2) Unemployment numbers remain steady. Both the number of unemployed persons (7.1 million) and the unemployment rate (4.6 percent) were about unchanged in July. The jobless rate has ranged
from 4.4 to 4.6 percent since September 2006. (Data from the Bureau of Labor Statistics)
(3) Raising the minimum wage will not reduce the poverty rate but increasing the number of jobs will in the short-term.
(4) The low-skilled labor market continues to experience job loss due to advances in technology (robots, “self-check out” lanes, etc.)
(5) There has been considerable job growth since 2003. On August 3, The Bureau Of Labor Statistics released new jobs figures. Since August 2003, more than 8.3 million jobs have been created, with more than 1.8 million jobs created over the twelve months ending in July. Our economy has now added jobs for 47 straight months.
(6) According to White House data:

(a) Real GDP Grew At A Strong 3.4 Percent In The Second Quarter Of 2007. The economy has now experienced nearly six years of uninterrupted growth, averaging 2.7 percent a year since 2001.

(b) Real After-Tax Per Capita Personal Income Has Risen By 11.4 Percent

(c) Real Wages Rose 1.3 Percent Over The 12 Months Ending In June. This is faster than the average rate during the 1990s, and it means an extra $782 in the past year for a family with two average wage earners.

(d) Since The First Quarter Of 2001, Productivity Growth Has Averaged 2.8 Percent Per Year. This is well above the average productivity growth in the 1990s, 1980s, and 1970s.

In the end, the current poverty rate reduction is simply a result of a combination of the factors listed above. In order to continue reductions in poverty the business sector needs more freedom to create jobs to meet the needs of our changing communities. Tax burdens and frivolous government regulation continue to stifle entrepreneurial creativity and innovation. Additionally, the moral dimensions of poverty need continued attention by the various mediating institutions like the church and other non-profits. Poverty is multi-layered and material solutions alone will not bring about long-term reductions.

Blog author: jballor
Tuesday, August 28, 2007

When the sign for one of those payday lending stores went up on the corner a block away from my house, I have to say I was less than enthusiastic.

The standard response in a market economy to “market failure” is for a nonprofit to fill the gap in services or meet the need. Today’s NYT reports on efforts in the short-term loan industry to meet that need. As it stands in the market system, “Payday loan stores, which barely existed 15 years ago, now outnumber most fast-food franchises. Typically a customer borrows a few hundred dollars in exchange for a check, postdated to the next payday, made out in the amount of the principal plus a fee of $15 to $22 per $100 borrowed.” 22 dollars every two weeks works out to about 572 percent annual interest.

The troubling part of this is that those who are most likely to need these kinds of loans are the poor, people who are hit the hardest by higher rates of interest. It’s also clear that they are making some very poor fiscal decisions.

Nonprofit groups are in the early stages of setting up programs to help ameliorate the situation. GoodMoney, a joint venture of Goodwill Industries and Prospera Credit Union, charges about half of what for profit lenders charge. That still works out to over 200 percent interest annually, but “Of the $9.90 that GoodMoney charges per $100 borrowed, nearly half goes to writing off bad loans, Mr. Eiden said, and the rest to database service and administrative costs.” In the case of Ms. Truckey, profiled in the NYT piece, because of GoodMoney, “A few dollars from each payment go into a savings account, the first she has had in years.”

Programs like GoodMoney are still in their infancy and it’s clear that charging some level of interest might be a necessary part of encouraging responsibility and promoting independence on the part of the borrower. And market levels of interest approaching 600 percent per annum seem a bit like throwing someone in debtors prison if they can’t pay back a loan: there’s simply no way out of the mounting debt.

Now whether or not the amount that GoodMoney is charging isn’t precisely clear (there are no entries for GoodMoney at either GuideStar or Charity Navigator, and GoodMoney’s website doesn’t seem to disclose a breakdown of the programs expenses), but the enterprise itself is an interesting exercise in meeting the needs coming out of a pretty clear instance of market failure.

Do you ever walk into a business and see a license on the wall and wonder if that specific industry really needs to be licensed by the state? I know I have thought that, if just a few times. John Fund of the Wall Street Journal looks at how licensing laws hinders low prices and competition in the marketplace. In a piece titled, License to Kill Jobs, Fund also explains how over regulation has stymied job growth and the ability of new entrepreneurs to become more self reliant.

Fund also notes in his column:

In the 1950s, only about 4.5% of jobs required a license to work. Today, that proportion is more than 20%. Many of the jobs that require a government stamp of approval don’t involve health or safety. Depending on the state, you need a license to be a hair braider, florist, auctioneer, interior designer or even fortune-teller.

The cost of the education for the license also hurts those who may have the necessary skills but can’t afford to meet all the requirements. Furthermore, sometimes the licensing requirements have little to do with the relevancy of the actual work performed. Another aspect Fund looks at is the arbitrary nature and requirements from state licensing, compiled by a major study by the Reason Foundation. California requires 177 specific business types to be licensed, while Missouri requires only 41. The “Live Free or Die” state of New Hampshire, requires a walloping 130 licenses for specific businesses types.

Another interesting point Fund makes is the licensing requirements hurt the very consumers it’s meant to protect. Fund notes just a few of the facts from the Reason Foundation study:

The higher prices such licensing bodies impose for services can also hurt consumers by creating incentives to do dangerous jobs themselves. “Electrocution rates are higher in states with strict electrical licensing requirements, as more consumers risk performing their own electrical work,” the study notes. “Similarly, states with stricter dental licensing laws also have the highest incidence of poor dental hygiene.”

In the Wall Street Journal piece, the author also declares how in some instances the courts have stepped in and found some of the licensing requirements completely unnecessary, and additionally acts as a regulatory infringement on the right to earn a living. Fund also declares, “Some courts are even citing the 14th Amendment’s due process and equal protection clauses in striking down protectionist government regulations.”

Which makes one wonder all the more: Are the over-zealous requirements and so called need for licensing helping the consumer or just perpetuating higher prices, and lack of competition, which can result in inferior products and service? Obviously licensing in some classes of business are needed. But does everybody, in say an interior design or the florist industry need to be licensed? There are large and powerful lobbying groups able to protect and strengthen certain businesses from more competition, but in some cases little help for newcomers trying to break into the market. In addition, we often overlook just how much the market can regulate itself.

It all reminds me a little bit about the stories you see in the news print and media about young children getting their lemonade stands shut down by bureaucratic governmental standards . Concerning the crackdown on lemonade stands, where are the “It’s For The Children” speeches when they are actually needed?

It’s been at least a few months since I admitted abandoning all of my principles and ethics in favor of rolling around in great piles of filthy Exxon lucre, and I’ll be honest with you here – I haven’t even gotten so much as a thank you note from Rex Tillerson. Meanwhile, Al Gore appears to have offset his carbon emissions by planting a forest of magical money trees, and it’s HARVEST TIME, BABY!

Not too long ago, a premier ad agency wouldn’t touch a campaign warning about the effects of global warming, fearing backlash from the automakers and oil companies that keep Madison Avenue’s lights on. But now one of the most hotly contended pitches out there is for the Alliance for Climate Protection, the organization formed last year by Al Gore.

Four elite agencies — Crispin Porter & Bogusky, Bartle Bogle Hegarty, the Martin Agency and Y&R — are squaring off for the business and are expected to present to the former vice president himself early next month, according to executives familiar with the review. The budget for the “historic, three-to-five-year, multimedia global campaign,” as the request for proposals puts it, is contingent on how much money the alliance raises. Media spending will likely be more than $100 million a year.

So the next time you hear about all the millions of dollars being funneled to climate change skeptics, keep in mind that those puny millions are going up against a half-billion dollars in advertising alone on the other side of the issue. Heck, if I were really in this for cash, I’d be as hysterical as James Hanson

This summer I’m working on developing the syllabus for a class that I’ll be helping to lead in the Fall. The course will focus on readings in social ethics, with a general theme on church and culture, and a particular theme on church and poverty.

I’ll be reading through the selections on this particular theme over the next few weeks. I’d like to post the readings for the week that I’ll be going through, so that you can read along if you like. I’ll post my responses, observations, and questions as separate posts throughout the week, as starters for discussions that we can pursue in the comment threads if you so desire.

I’ll do my best to summarize works that may not be available or for those who aren’t able for whatever reason to engage the primary sources directly. Where available online, I’ll include links to the primary sources. Otherwise, the sources can only be found in print (this information is available upon request…some of them may be hard to find, and I’ll note those in the relevant post).

The readings will progress in roughly historical order. For this first week of readings, let’s look at:

  1. Cyprian of Carthage, On Works and Alms

  2. Clement of Alexandria, Who Is the Rich Man that Shall be Saved?
  3. Gregory of Nazianzus, On the Love for the Poor
  4. Gregory of Nyssa, Love of the Poor

Week 2:

  1. John Chrysostom, On Wealth and Poverty (Part 1; Part 2; Part 3).

Week 3:

  1. Bonaventure, A Defence of the Mendicants (selections), in From Irenaeus to Grotius: A Sourcebook in Christian Political Thought 100-1625, ed. Oliver O’Donovan and Joan Lockwood O’Donovan, pp. 312-19.

Week 4:

  1. Martin Bucer, De Regno Christi (selections), in Melanchthon and Bucer, Book I, Chapter XIV, “Care for the Needy,” pp. 256-59; Book II, Chapter XIV, “The Sixth Law: Poor Relief,” pp. 306-15.

Week 5:

  1. Richard Baxter, How to Do Good to Many (Part 1; Part 2; Part 3) (London, 1682; repr. 1830).

Week 6:

  1. John Wesley, “The Rich Man and Lazarus.”

Week 7:

  1. Abraham Kuyper, The Problem of Poverty.

Week 8:

  1. Walter Rauschenbusch, Christianity and the Social Crisis.

    To conclude this survey of a series of texts on the church and poverty, we’ll be looking at this piece from Rauschenbusch. This year marks the 100th anniversary of the first publication of Christianity and the Social Crisis, and a new centenary edition has been released this month by HarperSanFrancisco and includes responses to each chapter from figures such as Jim Wallis, Tony Camplo, Cornel West, Richard Rorty, Stanley Hauerwas, and others.

Blog author: E. Calvin Beisner
Friday, August 24, 2007

A letter to the editor in today’s Atlanta Journal-Constitution in response to two op-eds in that paper: “Global Warming: No urgent danger; no quick fix,” by Patrick J. Michaels and “Global warming: Don’t take skeptics at face value,” by John Sibley.

A taste: “Sibley the politician resorts to ad hominem attack on those with whom he disagrees. Michaels the scientist appeals to evidence.” Scroll down to the second letter to see the whole thing.

Blog author: jballor
Thursday, August 23, 2007

Readings in Social Ethics: Abraham Kuyper, The Problem of Poverty. References below are to page numbers.

  • With next week’s reading of Rauschenbusch in view, here’s how Kuyper evaluates Christian socialists: “Socialists constantly invoke Christ in support of their utopias, and continually hold before us important texts from the Holy Word. Indeed, socialists have so strongly felt the bond between social distress and the Christian religion that they have not hesitated to present Christ himself as the great prophet of socialism” (27).

  • Here’s what Jesus’ social message really consists in: “If you ask what Jesus did to bring deliverance from the social needs of his time, here is the answer. He knew that such desperate needs grow from the malignant roots of error and sin, so he placed the truth over against error and broke the power of sin by shedding his blood and pouring out his Holy Spirit on his own. Since rich and poor had become divided because they had lost their point of union in God, he called both together back to their Father who is in heaven. He saw how the idolizing of money had killed nobility in the human heart, so he held up the “service of Mammon” before his followers as an object for their deep contempt. Since he understood the curse that lies in capital, especially for the man of great wealth, he adjured him to cease his accumulation of capital and to gather not treasure on earth, where moth and rust corrupt and thieves break in and steal (Matt. 6:19). He rejected the rich young man because he could not decide to sell all his goods and give to the poor. In his heart Jesus harbored no hatred for the rich, but rather a deep compassion for their pitiable condition. The service of Mammon is exceedingly difficult. Sooner would a camel go through the eye of a needle than would a rich man enter the kingdom of heaven (Matt. 9:16-24). Only when the possession of money leads to usury and harshness does Jesus become angry, and in a moving parable he tells how the man who would not release his debtor is handed over to torturers and branded as a wicked servant who knows no pity (Matt. 18:23-35)” (37-38).
  • Likewise Kuyper says: “The socialists so flatly reverse [this] when they preach it: “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.” (Matt. 6:33). For both rich and poor, Jesus’ teaching simultaneously cuts to the root of sin in our human heart” (39-40).
  • The deep interconnections between material want and spiritual need: “A charity which knows only how to give money, is not yet Christian love. You will be free of guilt only when you also give your time, your energy, and your resourcefulness to help end such abuses for good, and when you allow nothing that lies hidden in the storehouse of your Christian religion to remain unused against the cancer that is destroying the vitality of our society in such alarming ways…You do not honor God’s Word if, in these circumstances, you ever forget how the Christ, (just as his prophets before him and his apostles after him) invariably took sides against those who were powerful and living in luxury, and for the suffering and oppressed. Even more appalling is the spiritual need of our generation. When, in the midst of our social misery, I observe the demoralization that follows on the heels of material need, and hear a raucous voice which, instead of calling on the Father in heaven for salvation, curses God, mocks his Word, insults the cross of Golgotha, and tramples on whatever witness was still in the conscience–all in order to inflame everything wild and brutish in the human heart–then I stand before an abyss of spiritual misery that arouses my human compassion almost more than does the most biting poverty” (62-63).
  • Solidarity as expressed ultimately in the sacrament of communion: “The tremendous love springing up from God within you displays its radiance not in the fact that you allow poor Lazarus to quiet his hunger with the crumbs that fall from your overburdened table. All such charity is more like an insult to the manly heart that beats in the bosom of the poor man. Rather, the love within you displays its radiance in this: Just as rich and poor sit down with each other at the communion table, so also you feel for the poor man as for a member of the body, which is all that you are as well. To the poor man, a loyal handshake is often sweeter than a bountiful largess. A friendly word, not spoken haughtily, is the gentlest balm for one who weeps over his wounds. Divine compassion, sympathy, and suffering with us and for us–that was the mystery of Golgotha. You, too, must suffer with your suffering brothers. Only then will the holy music of consolation vibrate in your speech. Then, driven by this sympathy of compassion, you will naturally conform your action to your speech. For deeds of love are indispensable” (77). See also 1 Corinthians 11:17-34.
  • Is state welfare an adequate substitute for Christian charity? Never: “The holy art of ‘giving for Jesus’ sake’ ought to be much more strongly developed among us Christians. Never forget that all state relief for the poor is a blot on the honor of your Savior” (78).

Next week: Walter Rauschenbusch, Christianity and the Social Crisis.