Archived Posts February 2009 » Page 2 of 5 | Acton PowerBlog

The National Catholic Register’s Tom McFeely interviewed Sam Gregg, director of research at Acton, about President Barack Obama’s $75-billion plan to help mortgage holders at risk of default.

McFeely: What is your overall assessment of President Obama’s mortgage relief plan? Is it likely to work?

Sam Gregg: Without question, thousands are suffering as mortgage defaults rise across America. Their plight should not be trivialized. That said, I am deeply skeptical of the mortgage relief plan. I believe that it will be counterproductive and only harm those that it is intended to help.

First, we know that something like 55% of people who have defaulted on their mortgage and received a temporary reprieve typically re-default within six months. In short, this plan is likely to encourage people to stay in painful situations instead of moving on with their lives, rebuilding their credit, and investing their talent, time and energy in more productive activities.

Secondly, the plan will encourage some to stay attached to mortgages that are worth far more than the real value of the actual properties. Frankly, foreclosure or individuals renegotiating their mortgages with their banks would be better, and allow for a faster recovery of the housing market, which is truly in the interests of the common good.

Read “The Morality of Mortgage Relief” on the NCR site.

Blog author: jballor
posted by on Monday, February 23, 2009

From the scuffle over “Buy American” provisions in the most recent federal stimulus package, to concerns about declining exports in countries like China, to high-profile meetings of politicians and economists, it seems like anti-globalization sentiment is on the rise.

Advocates of isolationism, protectionism, and localism have decried the increasingly integrated global economy for years. But the sharpness of criticisms of globalization has sharpened in the context of the global economic downturn. Reflecting on the World Economic Forum in Davos earlier this year, Adrian Hamilton concluded that “the political leaders of the world are going to have to start again to reforge an international consensus on trade and regulation. The internationalism of tomorrow — today indeed — will have to be recreated out of national concerns and a degree of national protection.”

This week’s PowerBlog Ramblings question is: “In what ways, if any, is globalism in retreat?”

Ramble on…

Thanks to Clear Channel Radio, I was able to attend Dave Ramsey’s event in Grand Rapids last night. I used to listen to Ramsey on the radio quite a bit as a seminary student in Kentucky and I was always impressed by how much he was inspiring American families to live within their means and become better financial stewards of their resources and income. His own personal faith testimony is very real and inspiring and that brings me to another point concerning his presentation last night.

Last month, Acton’s director of communications, John Couretas, wrote a commentary titled “Obama and the Moral Imagination,” where he asked “If religious conservatives and free market advocates are to oppose Obama on those issues where there is fundamental disagreement, they will have to craft their own counter-narrative to ‘change the trajectory.’ No small task.”

One of my immediate impressions about Ramsey is his mastery of the narrative style of teaching and motivating. He effectively uses his own personal testimony to motivate people. By using his story in the fashion that he does, he disarms possible objections to his teachings and allows attendees to embrace and connect their story to Ramsey’s story. And I mean, not only his financial story, but also his own faith story as well. I would also add that his humor is far wittier and funnier perhaps than any stand up comedy I have ever heard.

How does this then relate to fiscal conservatism and the importance of free markets? Several times last night Ramsey stressed this by saying that “you are not going to spend like Congress anymore.” He uses the story and behavior of Congress to powerfully contrast that with a new found ability of a person to budget, save, and invest. Ramsey even expressed his strong desire to see Congress overturned. He expressed confidence in the long term benefits of the market, while simultaneously denouncing the stimulus bill. Here is a you tube clip of Ramsey on his radio show railing against what he calls the “spending bill.” Ramsey made a good point I stressed last week on a radio appearance of my own, and that is this: “When America is more financially responsible, they will demand more financial responsibility from their leaders.”

The entire event is a creative introduction to his financial teachings, what he calls the seven baby steps to get your financial future on track. He ended the event by sharing more about his relationship with God, and stressing that it is relationship with God that matters most, and it is the greatest life changing principle he teaches.

It’s a truism that progressive Christians emphasize the pervasiveness of structural or institutional evil, often at the expense of individual or personal sin. The structures of the world are broken and they, not individuals, are responsible for the enduring injustices in the world.

But how come this perspective is never (or rarely) aimed at the bureaucracy of government? Sure, when the government does something political progressives don’t like, they’re quick to condemn the institution itself. But why isn’t the broken bureaucracy of public education or public welfare, for instance, ever to blame?

Lord Acton: “Bureaucracy is undoubtedly the weapon and sign of a despotic government, inasmuch as it gives whatever government it serves, despotic power.”

A wave of financial protectionism is embedded in much of the stimulus legislation and bailout measures that have been adopted in Europe and America in recent weeks. One result of these ill-advised moves will be a dramatic reduction in private capital flows to emerging markets in 2009. “Among the biggest losers will be Latin American nations,” warns Samuel Gregg in his commentary.

Read the commentary at the Acton website and comment on it here.

In response to the question, “What are the moral lessons of the American Recovery and Reinvestment Act (ARRA)?”

Does the ARRA mark the dawn of a new era of government accountability, from a government “of the people, by the people, for the people”?

President Obama seems to think so. He says as much in a video statement tied to the launch of Recovery.gov, “a website that lets you, the taxpayer, figure out where the money from the American Recovery and Reinvestment Act is going.”

The site claims that “the American Recovery and Reinvestment Act will be carried out with full transparency and accountability — and Recovery.gov is the centerpiece of that effort.”

In his brief statement, President Obama says, “The size and scale of this plan demand unprecedented efforts to root out waste, inefficiency, and unnecessary spending.”



Your Money at Work from White House on Vimeo.

Call me cynical, but somehow I doubt that a package that was rushed through without time for reflection and public examination is going to ex post facto become accountable to the people.

Let’s just say that if the “transparency” of the way the TARP funds have been distributed and used is any model for what’s going to happen with ARRA, we’ll be a long way from a new era of government accountability. Recovery.gov looks a lot more like window dressing, or better yet an arranging of the deck chairs on the Titanic after the ship has already sailed.

Brief excerpts from Lawrence Reed’s classic 1981 article on the Great Depression, published in The Freeman and now republished by the Mackinac Center for Public Policy (which I just received in the mail)…

Reed divides the GD into four phases:

To properly understand the events of the time, it is appropriate to view the Great Depression as not one, but four consecutive depressions rolled into one. Professor Hans Sennholz has labeled these four “phases” as follows: the business cycle; the disintegration of the world economy; the New Deal; and the Wagner Act. The first phase explains why the crash of 1929 happened in the first place; the other three show how government intervention kept the economy in a stupor for over a decade.

Then, Reed deals with myths about Hoover as laissez-faire and Roosevelt delivering what he promised…

Did Hoover really subscribe to a “hands off the economy,” free-market philosophy? His opponent in the 1932 election, Franklin Roosevelt, didn’t think so. During the campaign, Roosevelt blasted Hoover for spending and taxing too much, boosting the national debt, choking off trade, and putting millions of people on the dole. He accused the president of “reckless and extravagant” spending, of thinking “that we ought to center control of everything in Washington as rapidly as possible,” and of presiding over “the greatest spending administration in peacetime in all of history.” Roosevelt’s running mate, John Nance Garner, charged that Hoover was “leading the country down the path of socialism.” Contrary to the modern myth about Hoover, Roosevelt and Garner were absolutely right.

Can any serious scholar observe the Hoover administration’s massive economic intervention and, with a straight face, pronounce the inevitably deleterious effects as the fault of free markets?…

Franklin Delano Roosevelt won the 1932 presidential election in a landslide, collecting 472 electoral votes to just 59 for the incumbent Herbert Hoover. The platform of the Democratic Party whose ticket Roosevelt headed…called for a 25 percent reduction in federal spending, a balanced federal budget, a sound gold currency “to be preserved at all hazards,” the removal of government from areas that belonged more appropriately to private enterprise, and an end to the “extravagance” of Hoover’s farm programs. This is what candidate Roosevelt promised, but it bears no resemblance to what President Roosevelt actually delivered….

Reed’s wrap-up:

The genesis of the Great Depression lay in the inflationary monetary policies of the U.S. government in the 1920s. It was prolonged and exacerbated by a litany of political missteps: trade-crushing tariffs, incentive-sapping taxes, mind-numbing controls on production and competition, senseless destruction of crops and cattle, and coercive labor laws, to recount just a few. It was not the free market that produced twelve years of agony; rather, it was political bungling on a scale as grand as there ever was.

For more on this post, click here

Blog author: eschansberg
posted by on Wednesday, February 18, 2009

A little more than a year ago, I wrote a really nice piece on this topic– on the occasion of the 100th anniversary of the nation’s first eugenics law (in Indiana).

Now, more historical context from Jesse Walker at Reason

In 1888, a social reformer named Oscar McCulloch delivered a speech in Buffalo titled “The Tribe of Ishmael: A Study in Social Degradation.” Indianapolis, McCulloch declared, had been infected by a “pauper ganglion,” a depraved clan that survived “by stealing, begging, ash-gathering”…They also received “almost unlimited public and private aid,” which merely “encourag[ed] them in this idle, wandering life, and in the propagation of similarly disposed children.”

The speech had lasting implications for both the poor people of Indiana and the budding pseudoscience of eugenics. It also was largely untrue, reports the historian Nathaniel Deutsch in Inventing America’s “Worst” Family (University of California Press), an insightful new study of the Ishmaels and their interpreters….

McCulloch was an early advocate of both eugenics and the social gospel, a toxic combination that foreshadowed the pending Progressive Era….a self-proclaimed socialist—even as he increased his contempt for, and willingness to use the law against, paupers who preferred to remain outside the wage economy….

But his most influential contention was not that the Ishmaels were a social evil. It was that they were a social evil with a biological basis…

Such ideas had consequences. In 1905 Indiana restricted marriages by former inmates “of any county asylum or home for indigent persons.” In 1907, influenced by McCulloch’s studies, the state adopted what may be the world’s first compulsory sterilization law….

For more on this post, click here

Blog author: eschansberg
posted by on Wednesday, February 18, 2009

A staggering piece by Stephen Baskerville in Touchstone…

I’ve written at length that marriage has been damaged much moreso by divorce than by calls for (or movements toward) “same-sex” marriage. Baskerville expands on that and discusses the initial “grand experiment” on marriage– the policies behind the move toward easier divorce.

G. K. Chesterton once observed that the family serves as the principal check on government power, and he suggested that someday the family and the state would confront one another. That day has arrived.

Chesterton was writing about divorce, and despite extensive public attention to almost every other threat to the family, divorce remains the most direct and serious. Michael McManus of Marriage Savers writes that “divorce is a far more grievous blow to marriage than today’s challenge by gays.”

Most Americans would be deeply shocked if they knew what goes on today under the name of divorce. Indeed, many are devastated to discover that they can be forced into divorce by procedures entirely beyond their control. Divorce licenses unprecedented government intrusion into family life, including the power to sunder families, seize children, loot family wealth, and incarcerate parents without trial. Comprised of family courts and vast, federally funded social services bureaucracies that wield what amount to police powers, the divorce machinery has become the most predatory and repressive sector of government ever created in the United States and is today’s greatest threat to constitutional freedom.

Some four decades ago, while few were paying attention, the Western world embarked on the boldest social experiment in its history. With no public discussion of the possible consequences, laws were enacted in virtually every jurisdiction that effectively ended marriage as a legal contract. Today it is not possible to form a binding agreement to create a family. The government can now, at the request of one spouse, simply dissolve a marriage over the objection of the other….

This startling fact has been ignored by politicians, journalists, academics, and even family advocates. “Opposing gay marriage or gays in the military is for Republicans an easy, juicy, risk-free issue,” wrote Gallagher. “The message [is] that at all costs we should keep divorce off the political agenda.” No American politician of national stature has ever challenged involuntary divorce….

For more on this post, click here.

In this week’s Acton Commentary, Anthony Bradley exposes the “legislative incantations” designed to artificially create consumer demand (where none exists) via the stimulus bill. “Real needs must be permitted to create real demand, and thus truly sustainable jobs,” he writes.

Read the commentary at the Acton Institute website and share your feedback here.