Archived Posts 2009 » Page 7 of 45 | Acton PowerBlog

It’s over a year now since the 2008 financial crisis spread havoc throughout the global economy. Dozens of books and articles have appeared to explain what went wrong. They identify culprits ranging from Wall Street financiers overleveraging assets, to ACORN lobbying policy-makers to lower mortgage standards, to politicians closely connected to government-sponsored enterprises such as Freddie Mac and Fannie Mae failing to exercise oversight of those agencies.

As time passes, armies of doctoral students will explore every nook and cranny of the 2008 meltdown. But if most governments’ policy responses to the crisis are any guide, it’s apparent that many lessons from the financial crisis are being ignored or escaping most policy-makers’ attention. Here are five of them.

Perhaps the most prominent unlearned lesson is the danger of moral hazard. The message conveyed to business by many governments’ reactions to the financial crisis is this: if you are big enough (or enjoy extensive connections with influential politicians) and behave irresponsibly, you may reasonably expect that governments will shield you from the consequences of your actions. What other message could businesses such as AIG, Citigroup, Royal Bank of Scotland, Lloyds, and Bank of America have possibly received from all the bailouts and virtual nationalizations?

A second unlearned lesson is that once you allow governments to increase their involvement in the economy to address a crisis, it is extremely difficult to wind that involvement back. Indeed, the exact opposite usually occurs.

Who today remembers the stimulus and bailout packages so heatedly debated in late-2008? They pale next to the fiscal excesses of governments in America and Britain throughout 2009. Recessions and subsequent government interventions create an atmosphere in which the hitherto implausible – such as trillion-dollar, 1900 pages-long healthcare legislation in an era of record deficits – becomes thinkable. Likewise the Bush Administration’s bailout of Chrysler and GM morphed into the Obama Administration’s virtual appropriation of the same two companies. (more…)

How do we restore confidence in free markets? Formulate a robust explanation of their moral value. Read Economic Liberalism and its Discontents on Public Discourse.

In his recent book The Creation and Destruction of Value, Princeton University’s Harold James observes that the 2008 financial crisis resulted in more than the devastation of economic value. It also facilitated a collapse of values in the sense of people’s faith in particular ideas, institutions, and practices. Among these, few would question that economic Liberalism’s credibility was significantly undermined.

As time passes, more people may recognize that the financial crisis owed much to factors that had little to do with markets as such. As several scholars illustrated in the 2009 monograph Verdict on the Crash, the causes included regulations that encouraged irresponsible behavior by banks, imprudent central bank policies, not to mention outright collusion between politicians and government-sponsored enterprises such as Fannie Mae and Freddie Mac.

Unfortunately for promoters of free markets, knowledge of these facts will take time to counter the widespread perception that economic liberalism—manifested in financial liberalization, privatization, deregulation, and increased competition—contributed significantly to the 2008 crisis.

In the meantime, those committed to economic liberalism have a chance to rethink and reformulate the case for markets. Certainly the efficiency arguments for economic freedom will be revisited, refined, and rearticulated. But it’s also an opportunity for economic liberals to reexamine what is often a weakness in their position—the principled case for markets.

This weekend’s Grand Rapids Press featured a story about the release of the NIV Stewardship Study Bible. Ann Byle writes,

Three Grand Rapids-based organizations and numerous local residents joined forces recently to create a study Bible that focuses on stewardship.

The Acton Institute, the Stewardship Council and Zondervan brought the NIV Stewardship Study Bible into print after more than five years of work that began with Brett Elder, the council’s executive director.

Elder traveled the world speaking on generosity. He said people were receptive to his message, but pastors and church leaders asked him for resources to equip their congregations.

“The only resource that transcends culture is Scripture,” said Elder, who began searching for a Bible to fill that need.

Check out the whole story here. And visit the NIV Stewardship Study Bible website to enter the Stewardship 1000 challenge.

Black leaders constantly remind Americans of our racism. Should not these same leaders protest the expansion of government control contained in the health-care reform bill currently working its way through Congress?

Here’s why. Notwithstanding their rhetoric of freedom and empowerment, many prominent black leaders appear content to send blacks back to the government plantation—where a small number of Washington elites make decisions for blacks who aren’t in the room. Why do minority leaders not favor alternatives that demonstrate faith in the intelligence and dignity of people to manage their own lives?

In a sermon at Howard University, the Rev. Jeremiah Wright reminded university students that, “Racism is alive and well. Racism is how this country was founded and how this country is still run.” During the presidential campaign, Wright explained to his parishioners that America is “a country and culture controlled by rich white people.” But if racists and “rich white people” control America, why do those sympathetic to Wright assume that those same people will look out for the health of blacks?

If Princeton religion professor Cornel West was right in his 2008 book, Hope on a Tight Rope, that “the very discovery that black people are human beings is a new one,” then shouldn’t blacks raise questions about centralizing health care decisions in a bureaucracy peopled by officials who are only recently cognizant of minorities’ humanity? “White brothers and sisters have been shaped by 244 years of white supremacist slavery, 87 years of white supremacist Jim and Jane Crow, and then another 40 years in which progress has been made” but “the stereotypes still cut deep,” West wrote. He admits “relative progress for a significant number of black people,” but warns that there has not been “some kind of fundamental transformation” in America. Dr. West asserts that “white supremacy is married to capitalism.” If that is true, then why would we want to set up a health-care system that strengthens the government sanction of health-care provision by businesses?

If Georgetown University sociology professor Michael Eric Dyson is correct about the current racial and structural injustice impeding poor blacks, then there is cause for concern. In response to Bill Cosby’s “conservative” reflections on black America in 2006, the Rev. Dr. Dyson wrote, “Cosby is hell bent on denying that race and structural forces play any role in the lives of the poor.” He continued by saying, “The plane of black progress lifts on the wings of personal responsibility and social justice.” If race and structural forces are at work against blacks, why not promote personal responsibility and justice by liberating them from dependence on those structures and putting them in a position to call their own shots?

If CNN analyst Roland Martin was right on February 18, 2009, when he said, “while everyone seems to be caught up in the delusion of a post-racial America, we cannot forget the reality of the racial America, where African-Americans were treated and portrayed as inferior and less than others,” then shouldn’t blacks be concerned about centralized health care, which will tether them ever more securely to a fundamentally corrupt political system? We cannot hope for change, after all: Martin insists that “the realities of race” are “being played out in our communities each day,” and had earlier reminded us that when it comes to white racism blacks should “accept the fact that some people will not change” (September 10, 2008).

Many black leaders seem confused on this point. If America has a race problem, then it will manifest itself in both public and private sectors. Expanding Medicare and Medicaid only subjects poor blacks to more government control. Economic empowerment and returning health decisions to black people are the only way to eradicate concerns about structural injustice. When health-care providers compete for their patronage, blacks are empowered and control their own destinies. Economic freedom in health care is a moral and civil-rights issue because for too long blacks have suffered the indignity of having political structures make surrogate decisions about their bodies.

Black leaders should encourage policymakers to make health more affordable by giving individuals absolute control over their earnings with concomitant power to choose their own health plan. Instead, they are conspiring with Congress to lead us back to the plantation.

The Economist marked the 20th anniversary of the fall of the Berlin Wall by observing that there was “so much gained, so much to lose.” As the world celebrates the collapse of communism, who would have imagined that in less than one generation we would witness a resurgence of socialism throughout Latin America and even hear the word socialist being used to describe policies of the United States?

We relegated socialism to the “dustbin of history,” but socialism never actually died and in many ways it has actually gained influence. This may sound reactionary, even McCarthyist—but only until we understand socialism the way socialists understand it.

Yes, socialist economic ideas went out of fashion, but socialism has always been more than just economics. We tend to equate socialism with communism, Marxist revolutionaries, and state ownership of industry. But socialism is a much broader vision of the person, society, equality, and what it means to be free.

Karl Marx’s collaborator, Friedrich Engels, saw three major obstacles to the socialist vision: private property, religion, and “this present form of marriage.” Also central to socialist thought is a secular and materialist vision of the world that espouses relativism, sees everything politically, and locates genuine community in the state and not in families, churches or voluntary organizations.

The fall of communism and two decades of globalization did not extinguish socialist hopes. The tactics changed, but the goals remained. Proponents of socialism traded in revolution for the gradualism of the Fabian socialists who encouraged use of democratic institutions to achieve socialist goals. They replaced political radicals like Lenin and Castro with the cultural Marxism of Theodor Adorno or Antonio Gramsci, who called for a “long march through the institutions” of Western culture.

This is the pedigree of Saul Alinsky, Bill Ayers, and the various sixties revolutionaries who now inhabit positions of cultural influence throughout the West. We are seeing the fruit of their efforts: socialist visions of family, religion, art, community, commerce, and politics pervade the culture.

I am not suggesting that Americans or Europeans live in socialist states. That would trivialize the suffering of those who lived behind the Iron Curtain. Rather, I am suggesting that socialist ideas have transformed the way many of us think about a host of important things. Ideas considered radical only 75 years ago are now considered quite normal and even respectable.

Look, for instance, at co-habitation rates and the number of people who do not believe in marriage or view it as a “bourgeois” institution. Directly or indirectly, they got these ideas from people like Engels and Adorno, who argued that “the institution of marriage is raised… [on] barbaric sexual oppression, which tendentially compels the man to take lifelong responsibility for someone with whom he once took pleasure in sleeping with….” The same-sex marriage movement and hostility to the traditional family follow Engels goal to destroy “this present form of marriage.”

In other realms, we see increasing secularization, religion being equated with intolerance and decreasing religious practice. Look at the common acceptance of ethical and cultural relativism and the fear of making truth claims lest one be labeled an extremist. Look at the unquestioned supremacy of materialist and Darwinist thought that dominates the scientific community, or the political correctness that pervades language. Look at our public school system, increasingly focused on indoctrination rather than education. We joke that the universities are the last bastion of Marxism. But who do we think writes the textbooks that teach primary and high school students? The “long march through the institutions” has been more successful than its early advocates could have dreamed.

Of course it would be simplistic to blame socialism for all that ails the West. But socialism has been the principal vehicle of many of these ideas, carrying them into the mainstream.

So how is it that, after such dramatic failures, socialism continues to allure? Perhaps because, as future pope Benedict XVI, Joseph Ratzinger, wrote, the Marxist dream of radical liberation still captures the modern imagination.

It’s a dream that will always betray, because sustained liberty requires a certain moral culture: one that respects truth and conforms to it; one that recognizes the inherent dignity and spiritual nature of the person; one that respects the role of the family and encourages a rich and varied civil society; one that acknowledges that culture and religion are more important than politics; one that respects rule of law over the arbitrary rule of men and rejects utopian delusions; one that recognizes that the difference between right and wrong is not determined by majority, consensus or fashion; and, finally, one that recognizes that the ultimate source of liberty is God and not the state.

The fall of Communism in Eastern Europe was one of the great victories for human freedom. But while the East suffered untold misery, perhaps it was too easy a victory for us in the West. We were lulled into thinking that socialism had been discredited, had lost its allure—that capitalist economies and abundant goods were sufficient to satisfy human desires. Perhaps we should have listened more closely to those like John Paul II or Alexander Solzhenitsyn who warned us about an empty materialism, an insidious relativism, and a vitiated culture.

The challenges of socialist thought are real. But there is hope. There is hope in the resurgent resistance to the unprecedented growth of government. There is hope in the millions of families who work hard and in the thousands who make sacrifices for freedom every day. This week we celebrate the victory of freedom and the collapse of applied socialism. Let us not come to a point where we look back with regret that we forfeited such a precious gift.

Blog author: hunter.baker
posted by on Wednesday, November 11, 2009

A colleague recently mentioned that a wag had observed the church had failed to solve poverty, so why not let the federal government have a try?

I think it is interesting that anyone, such as the wag in question, could think that the federal government can effectively solve the problem of poverty. I don’t think it can because it resolutely refuses to confront the sources.

Really, truly, don’t we know the cause of a great deal of the poverty in our midst? Here’s a hint: Adam Smith thought the poor who gravitated to the fiery preachers were wise. Why? Because the hell and brimstoners alone preached the doctrines that might prevent the poor from the catastrophic consequences of things like losing their jobs and money on liquor and gambling.

I can recall having lunch with Micah Watson, a colleague who teaches at Union, and he was talking about the trouble Jackson, TN has with some of its public schools. He said something that stuck. He said, “Many families in our school district lack the cultural capital to succeed.”

And he is right. Anyone who looks at the research in a dispassionate way will discover that people who do just a few things will almost never live in poverty. Those few things are that they will graduate from high school, get married, and delay childbearing until after marriage. If you do that, you will probably not spend your life below the poverty line.

Going a little further you will also find that children who come from intact, two parent families are significantly more likely to do better in school, to have fewer behavioral problems, to commit fewer crimes, to stay out of jail, to avoid sexual and physical abuse, and to stay off of public assistance than are their peers from broken homes or from single parent homes. These things are true even if you control for race.

For some reason, and I would argue that it is partially because of our silly secular mindset that favors avoiding moralism, we are unwilling to embody some of this knowledge in our public policy. When President Bush suggested that maybe we just might consider trying to encourage marriage among the poor, protest erupted. It was the same old thing, theocracy, blah, blah, blah . . . For some reason the morality that extends welfare to poor people is perfectly fine while the morality that would gently urge them toward the things that help human beings flourish is threatening and terrible and ultra-religious.

Does the church do enough? It does not, but I would argue that in part we fail to combat the problem of poverty adequately in the church because we think the duty has been subcontracted out to the state. The larger the state becomes, the less air is left in the community space for everyone else, especially the church because we buy into the idea of a secular state. (This is a point I talk about, by the way, in The End of Secularism.) The state eats up both resources and social influence. The system does not realize it has a soul, or if it does it is busy trying to kill it.

Blog author: rnothstine
posted by on Wednesday, November 11, 2009

373613_cover.indd Washington Post reporter and author Christian Davenport has told a deeply raw and emotional story in his new book As You Were: To War and Back with the Black Hawk Battalion of the Virginia National Guard. This book does not focus on battlefield heroics but rather it captures the essence and value of the citizen- soldier. Most importantly this account unveils through narrative, the pride, the pain, and the harrowing trials of the life of America’s guardsmen and reservists. Davenport tells the stories of Mark Baush, Kate Dahlstrand, Craig Lewis, Miranda Summers, and Ray and Diane Johnson. He tells of their deployment and return home. For some it means the end of a marriage, Post Traumatic Stress Disorder diagnoses, career and schooling problems, getting gamed by a grueling bureaucracy, and perhaps most common, a disconnect from the society at home after deployment.

Davenport focuses on some very important themes related to the disconnect some soldiers feel. It may be that guardsmen and reservists experience it to an even greater extent than soldiers in the regular Army. They in fact live and work in the civilian world. One example from the book is Craig Lewis, a former teacher who tries to find a job after his return from Iraq. He performs above and beyond the call of duty as a Blackhawk pilot, is promoted and given command of a company in the guard. But in the civilian world he had immense difficulty finding any sort of quality employment. Davenport notes:

Federal law required that employers, and even small companies, hold jobs for deploying reservists. Swept up in the wave of patriotism after 9/11, many sent their citizen-soldiers off to war with pats on their backs, flags waving. Many employers even made up the difference in pay. But as the wars slogged on, and soldiers were called to active duty again and again, the word reservist suddenly had a stigma attached to it.

Miranda Summers’ story in some ways mirrors the experience of many guardsmen and reservist in college at the time of deployment. Summers balances academics, social and sorority life, and her National Guard commitment. She is a student at The College of William & Mary, and later a graduate student at Brown University after her return from Iraq. At William & Mary she is asked when somebody finds out she is going to Iraq, “I thought only poor people go to war?” At Brown the experience is a little different when a student proclaims, “I have never met anybody in the military.” The opening of this book is deeply moving, when Davenport tells how Summers is embraced by a World War II veteran at the memorial commemorating that conflict in Washington D.C.

There is a saying that was put on a dry erase board at a Marine Corps operation center in Iraq which read, “America is not at war. The Marine Corps is at war; America is at the mall.” It conjures up all the frustration some in the military feel about the lack of sacrifice on the American home front and the general disconnect. It’s an alien concept to the total war of World War II or even the draft obligations of Vietnam. The soldiers, sailors, airmen, and Marines currently represent an all volunteer force. The Founders understood the dangers of the disconnect and Davenport makes note of this in his account:

The framers, having thrown off a king who could wage war without the hindrance of popular sentiment, knew this, and they had designed the system so that burdens of war were spread through out the population. Citizen-soldiers, then, weren’t a mere check against executive power, but rather the conscience of a nation. The cause had better be worthy of their sacrifice.

Davenport cites the famous Robert E. Lee quote, “It is well that war is so terrible, lest we grow too fond of it.” He sharply then notes a concern shared by some military and civilian leaders alike, “What happened instead is that America had grown ignorant of war, which was just as dangerous, if not more so.”

But it is the masterful ability to tell a story that makes this author shine. Davenport hauntingly captures the pride, emotions, and frustrations of the citizen-soldier. Some of the stories can be quite heartbreaking and the reader feels sympathy for those profiled. At the same time, Davenport is able to articulate the pride and importance the characters feel towards the nation and their service in it. My own brother Chris was a reservist in the Marine Corps who served in Iraq in an intense combat environment. He said the disconnect and alienation is real. “It’s not like you can just go back to whatever it is you were doing and things would be the same,” he told me. Kate Dahlstrand not only had her husband leave her when she was in Iraq, she suffered nightmares and flashbacks after her return. When she tried to contact Veterans Affairs for help, she was brushed aside. Kate was able to remarry and eventually receive some quality help after meeting James Peake, former Secretary of Veterans Affairs.

This is an amazing book and the theme that examines the isolation and brokenness that some soldiers feel is very penetrating. For the Christian, and being somebody who has worked in ministry and studied for the ministry myself, I had one overarching thought through this entire account. And it’s an appropriate thought especially during the coming Christmas season, and that is Christ felt all of the emotions of pain, hurt, loss, abandonment, abuse, and betrayal. Augustine said of the incarnation, “nothing was lacking that belongs to human nature.” The account by Davenport is also a reminder of the complexity and the enormous task so many military chaplains face in the Armed Forces. On this Veterans Day it is important to remember all our service men and women, and Davenport has achieved that by telling the unique stories of just a few who represent so many.

Blog author: mvandermaas
posted by on Tuesday, November 10, 2009

I was in the 8th grade in November of 1989, and I don’t think that the fall of the Berlin Wall had any immediate impact on my thinking at the time. I don’t remember if I watched the coverage on TV, or if there were any big discussions of the event in school during the following days. I was a history buff back then, to be sure – I still am – but I don’t think that I was engaged in contemplating the big issues of human liberty and individual rights at the time. Divided Berlin was simply a fact of life, and the source of interesting cold war tidbits like the story of the Candy Bomber during the Berlin Airlift, and the site of a Harlem Globetrotters game in early 1988 on ABC’s Wide World of Sports that I videotaped and watched again and again.

As I’ve grown older, I’ve had more time to reflect on the importance of human freedom and the evils of totalitarianism, and I’ve noted my tendency to take my freedom for granted. Over the last few weeks, as the anniversary of the Berlin Wall’s fall moved closer, I’ve had opportunity to take a fresh look at the history of divided Berlin, and the rise and fall of the barrier between the eastern and western sectors of that city. As I watched again the footage of jubilant Berliners streaming through the suddenly-opened gates, dancing atop the wall, embracing each other and weeping for joy, it occurred to me that the event seemed as if it had never really happened; after all, how can it be possible that during my lifetime, Berlin – now an utterly modern and cosmopolitan city – had been artificially divided in two with tyrannical rulers forbidding the residents of one half access to the other? Looking back from my 2009 perspective, it hardly seems real.

Rev. Robert A. Sirico - October 29, 2009

Rev. Robert A. Sirico - October 29, 2009

And yet here we are, already 20 years removed from one of the most spectacular links in the chain of events that culminated in the fall of communism in eastern Europe and the Soviet Union.

This year, the Acton Institute celebrated its 19th anniversary. At the dinner in celebration of that milestone, Rev. Robert A. Sirico – President and Co-Founder of the Acton Institute – gave an address that celebrated the great events of November 9, 1989, but also reminded us that the freedoms that we so often take for granted remain at risk in many ways. You can listen to his address using the audio player below.

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Additional links:
Murderous Idealism
The Red Plague

Blog author: jcouretas
posted by on Tuesday, November 10, 2009

From “The Origin of Russian Communism” by Russian philosopher Nicholas Berdyaev (published by Geoffrey Bles, 1937):

Marxism is not only a doctrine of historical and economic materialism, concerned with the complete dependence of man on economics, it is also a doctrine of deliverance, of the messianic vocation of the proletariat, of the future perfect society in which man will not be dependent on economics, of the power and victory of man over the irrational forces of nature and society. There is the soul of Marxism, not in its economic determinism.

In a capitalist society man is completely determined, and that refers to the past. The complete dependence of man upon economics can be explained as a sin of the past. But the future is otherwise; man can be freed from slavery. And the active agent which frees humanity from slavery and establishes the best life, is the proletariat.

To it are ascribed messianic attributes, to it are transferred the attributes of the chosen people of God; it is the new Israel. This is a secularization of the ancient Hebrew messianic consciousness. The lever with which it will be possible to turn the world upside down has been found. And there Marx’s materialism turns into extreme idealism.

(more…)

Blog author: jballor
posted by on Monday, November 9, 2009

From the opening page of Lester DeKoster’s Communism and Christian Faith (1962):

For the mysterious dynamic of history resides in man’s choice of gods. In the service of his god — or gods (they may be legion) — a man expends his energies, commits his sacrifices, devotes his life. And history is made. Understand Communism, then, as a religion; or miss the secret of its power! Grasp the nature of this new faith, and discern in contrast to it the God who alone can oppose its onward march; or misapprehend the character of the contest in which mankind is engaged, and misconceive our own historic task.