Archived Posts 2011 - Page 54 of 80 | Acton PowerBlog

The blame game in Washington is heating up on skyrocketing gas prices. Republicans are criticized as being in the back pocket of the oil industry and partaking in crony capitalism. The Democrat Congressional Campaign Committee is even cashing in by hosting a fundraiser that is based on what has been the House Republicans “decade long relationship of protecting Big Oil taxpayer giveaways, speculations and price gouging…” However blame is also placed on Democrats, with accusations of placing barriers to prohibit domestic drilling. The debate has also centered around how we can be better environmental stewards. We may find ourselves asking questions such as whether green energy promotes environmental stewardship, and if oil drilling results in a dramatic harm to the environment?

An article published by the Washington Examiner contains disturbing numbers that will not be received very positively. Oil production in the Gulf was lower than predicated by the Energy Information Administration (EIA); however, imports were up:

While oil production in the Gulf is down more than 10% from April 2010 estimates, net crude oil imports are up 5%. At $83 dollars a barrel (the approximate average price of oil in the fourth quarter of 2010) that means Obama’s oil drilling permatorium increased American dependence on foreign oil by about $1.8 billion dollars in the fourth quarter of last year alone. The numbers only get worse as Obama’s permitorium further cuts into production. A Wood Mackenzie study predicts that for all of 2011 the permitorium will result in the loss this year of about 375,000 barrels of oil a day.

More imported oil also means higher prices at the pumps. The EIA explains: “Retail gasoline prices tend to be higher the farther it is sold from the source of supply.” It costs more money to transport oil to your gas station from the Persian Gulf than from the Gulf of Mexico.

On April 26th, President Obama wrote a letter to Congress calling for “immediate action to eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil.” The tax breaks President Obama is asking to be removed are worth $4 billion per year. This isn’t the president’s first call to action. His 2012 budget proposal also calls for the removal of the “subsidies.” But some have pointed out that the oil industry does not receive direct subsidy payments in the way that some farmers do. The president’s proposal specifically states:

Eliminates Inefficient Fossil Fuel Sub­sidies. Consistent with the Administration’s Government-wide effort to identify areas for sav­ings, the Budget eliminates inefficient fossil fuel subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change. Approximately $4 bil­lion per year in tax subsidies to oil, gas, and other fossil fuel producers are proposed for repeal.

Here at the Acton Institute we have spoken in opposition to true subsidies, such as subsidized farming (articles can be found here, here, and here) and health care policy (a related article can be found here). In the past we have articulate the problems with subsidization. The language in President Obama’s budget proposal appears to be vague and does not specify where the oil industry will no longer be, in his words, subsidized. Is it in drilling? Does it affect gas prices? Ray Nothstine notes in his commentary, “High Gas Prices are Devastating to Poor” our moral obligation to the vulnerable and how the high gas prices are affecting them. With gas prices continuing to climb precautions should be taken to prevent even higher prices.

Brian Johnson, the American Petroleum Institute’s senior tax policy advisor, provides insight on the proposal in the president’s 2012 budget. Johnson explains that the president is proposing to remove the intangible drilling cost provision, which is the oil industry’s ability to deduct drilling “costs associated with labor, architecture, design and engineering; basically the building of an oil rig, a platform or any structure that allows the industry to get into the ground and find oil or natural gas.” Johnson claims this process helps in planning for the next stage of development and construction. Furthermore, Johnson claims the oil industry is already paying its fair share in taxes with an income tax rate at 48 percent. Whereas other S&P Industrials average a 24 percent effective tax rate. Stephen Comstock, also from API, responded to President Obama’s State of the Union Address in January, articulating problems with the president’s call to end subsidies for the oil industry.

While the call to end the oil subsidies is being criticized by some, others are supporting such an action. Bill Becker, a Senior Associate with Third Generation Environmentalism and an energy and climate specialist at Natural Capitalism Solutions, argues the subsidies place the United States at a competitive disadvantage to China and India in the competition to champion alternative energy:

If we are looking for ways to chip away at the budget deficit, to keep America competitive and to use market-based mechanisms to build a competitive clean energy economy, then subsidy reform should be near the top of the list.

Think of it this way: Imagine an Olympic marathon in which the U.S. team has to run on a steep and continuous uphill slope, while the teams from China and India run on a level track. That’s what “winning the future” will be like for the United States if we keep our perverse energy policies.  Direct and indirect taxpayer support for fossil energy, which far exceeds government support for emerging green energy technologies, almost certainly makes winning the future a futile race.

Becker also cites a report by the Government Accountability Office that claims “taxpayers are losing tens of billions of dollars in royalty payments in part because the Department of Interior doesn’t have sufficient capacity to monitor oil and gas production on public lands.”

In his letter address to Congress, the president calls to reinvest the $4 billion per year that the oil companies receive in subsidies into clean energy. The problem with current alternative energies is they are inefficient, not cost effective, and cause many unintended consequences (related articles on the inefficiency and unintended consequences of various alternative energies can be found here, here, here, and here).

Yes, we will need to develop good alternatives to oil over the long haul, but spending money on energy sources that are not effective is not a wise investment or a sign of being good financial stewards. If the tax provision and subsidies for the oil companies are to be cut, and taking into account the budget crisis the United States is currently facing, it may better serve the country to not reinvest the money and cut it out of the budget completely.

This piece was originally written for the Breakpoint blog. Crossposted with their permission.

Christians have a deep ambivalence about Ayn Rand that probably draws as deeply from the facts of her biography as from her famous novels. When the refugee from the old Soviet Union met the Catholic William F. Buckley, she said, “You are too intelligent to believe in God.” Her atheism was militant. Rand’s holy symbol was the dollar sign. Ultimately, Buckley gave Whittaker Chambers the job of writing the National Review essay on Rand’s famous novel Atlas Shrugged that effectively read her and the Objectivists out of the conservative movement. The review characterized Rand’s message as, “To a gas chamber, go!” Chambers thought Rand’s philosophy led to the extinction of the less fit.

In truth, the great Chambers (his Witness is one of the five finest books I’ve ever read) probably treated Rand’s work unfairly. Though Rand certainly made no secret of her contempt for those unable or unwilling to engage in true exchange of economic value, she was right to tell interviewers that she was no totalitarian because of her abhorrence for the use of force. She did not believe in compulsion. Instead, she wanted a world in which a man stood or fell on his productivity. Rand saw production as the one great life affirming activity. Man does not automatically or instinctively derive his sustenance from the earth. He must labor and produce. This was Rand’s bedrock and explains why she had such contempt for those who try to gain wealth through political arrangements. She saw this parasitism on every point of the economic spectrum from the beggar to the bureaucrat to the purveyor of crony corporatism.

The critical tension between Rand and Christian theology is on human worth. Christians affirm the inherent and very high value of individuals because of their creation in the image of God. Rand values human beings only for their achievements. A person who does not offer value is a leech, a “second rater.”

Atlas Shrugged, the film, is well worth seeing, both because of the challenge posed by Rand’s worldview and because it avoids the pedantic speech-making of the overly long novel. Rand doesn’t trust her story to get her philosophy across. The novel struggles under the weight of her desire to teach. Thanks to the constraints of the film medium, we learn through the development of the characters and the plot. As a result, the tale comes through quite clearly and simply.

The story proceeds from a fascinating premise: what if the most able were to go on strike and take their gifts away from the broader society (like Lebron taking his from Cleveland!)? These talented individuals stop producing because society (in the form of government) has begun to take their contribution for granted and seeks to control the conditions under which they live, work, and create.

Government action occurs under the rubric of equity, but these people who “move the world” — as one conversation in the film expresses — do not understand what claim the government has to order their lives or to confiscate the fruits of their labor. The villains of the piece are not so much any welfare class as much as corporatists who want to link their companies to government arrangements so as to assure profit without the need for strong performance. They go on about loyalty and public service, but it is a mask for mediocrity and greed. The heroes (Hank Rearden and Dagny Taggert) want to make money, but they are virtuous because they give obvious value for every cent they earn.

The underlying moral is that we must not make too great a claim to control the inventors and entrepreneurs lest we frustrate them into inactivity. Though we think we gain by taxing and regulating their efforts, there is a strong possibility that we will lose a great deal more by blocking the creative impulse and inspiring a parasitic ethic of entitlement.

Rand’s atheism, materialism, and reduction of the human being’s value to economic productivity are all severely problematic for a variety of good reasons. But one might compare her political and economic thought to chemotherapy, which is basically a form of poison designed to achieve a positive outcome. You don’t want to take it if you can avoid it. You hope the circumstances in which you would use it don’t arise. However, in an age of statism, it is a message that may need to be heard. Not so much in the hopes that it will prevail as much as to see it arrest movement in a particular direction which will end badly if it continues.

The Dressmaker of Khair KhanaPoverty is inevitable in a war zone, right? One’s movements are restricted, buildings and businesses are damaged, people flee. Add to that random acts of violence brought by the Taliban and the already damaged economy of Afghanistan in the mid-1990s and poverty seems unavoidable.

Never underestimate the entrepreneurial spirit. In The Dressmaker of Khair Khana: Five Sisters, One Remarkable Family, and the Woman Who Risked Everything to Keep Them Safe, journalist and Harvard Business School student Gayle Tzemach Lemmon sets off in search women who are able to start and sustain businesses in the most harrowing of times: war.

In Kabul, Lemmon meets Kamila Sidiqi, one of eleven siblings who must find a way to support her family during the years of Taliban rule. With her father having to flee the city and her mother in poor health, it falls on her shoulders to make sure she and her siblings eat and stay safe. She decides to learn sewing from her eldest sister and literally turns the family home into a design-studio, production line and warehouse. She seeks out clients, develops new lines of clothing and makes good on delivery dates. In other words, she creates a successful business.

But Kamila Sidiqi is not satisfied with merely keeping her own family safe and sound. As a Muslim, she believes it is her duty to help those less fortunate. She begins to train and hire neighborhood women to sew and do the detailed embroidery and beading work that her business requires. Her hope is to not only grow her own business, but teach skills to women so that they, too, can start their own businesses.

Eventually, Sidiqi is approached by the Women’s Community Forum, an NGO that teaches and trains women in business. Sidiqi is asked to become a leader, to travel and give workshops to other Afghani women trying to start businesses. If trying to keep a business going in war-torn Kabul is not frightening enough, traveling with the Women’s Community Forum is absolutely terrifying. In fact, one of Sidiqi’s sisters tries desperately to take Kamila out of taking this role, fearing for her life (with good reason). Sidiqi plunges ahead, believing again it is her duty to help as many people as she can escape poverty.

By the 2005, with the Taliban out of power, Sidiqi has started another business, “Kaweyan” (after a prosperous Iranian dynasty), that seeks to train aspiring business owners in skills such as writing business plans, budgeting, and utilizing interns in Afghanistan and several other countries. Her goal at that time was to create mobile teams that were able to visit and teach those in remote areas.

The Dressmaker of Khair Khana is a captivating war-time adventure story, but it is also a lesson in tenacity and courage. What will it take to overcome poverty? One person, with a great business idea, and the willingness to do whatever it takes to make that idea a reality.

Before we leave Bright Week, some paschal flash mob public square Spirit from a shopping mall in Beirut. Source: Sat-7 Arabic


According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. But we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in.

John Maynard Keynes and F. A. Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”.

Patriarch Bechara Rai

As a Lebanese Maronite Catholic student in Rome and a new intern at Istituto Acton, I had the great honor and privilege to attend the audience of the new Patriarch of Antioch of the Maronites, Bechara Rai, with Pope Benedict XVI. The April 14 audience gave me the occasion to think about our new Patriarch’s role in promoting the entrepreneurial vocation in Lebanon. Our new patriarch seems to be a very active, energetic man, in keeping with the majority of his flock, but both his church and his country face many daunting challenges.

The Lebanese have a great reputation for entrepreneurship the world over, dating from Phoenician times. The nation’s universities are also some of the best in the Arab world and the country has a strong capital base. But the seemingly constant political turmoil in Lebanon has forced many entrepreneurs to go abroad in search of the peace and stability required for economic growth, but entrepreneurial talent and technical knowledge still exist in large quantities — equal to any in the region.

Brain drain, how to make the best use of investments, cultural barriers and bureaucratic inefficiencies are all issues that a Lebanese entrepreneur must contend with, though all are surmountable. Indeed, a wide variety of non-profit organizations exist to provide crucial support services. And there are plenty of business plan contests that can help provide startup capital.

Perhaps the biggest obstacle to starting a business in Lebanon is the country’s lagging infrastructure, not surprising due to past and recent civil wars and foreign interventions. The individual entrepreneur is obviously limited in what he or she can do to improve the quality of the country’s telecommunications and electricity grids. But if we think of entrepreneurialism as state of mind, there is much the Maronite Church can do to encourage it.

The role of the Maronite Church in Lebanon remains a very important one culturally and politically, in addition to religiously. Half of the Lebanese population are Maronite, including the President of the republic. The Maronite Patriarch has Patriarchal See in Lebanon and the church works to preserve and strengthen the power of the Maronite Catholic Christian in Lebanon. The Maronite often finds himself caught between secular Syrian instigators, Shiite and Sunni Muslim factions, and Israeli military incursions, all of whom have their own particular interests and plans for Lebanon.

But, as a former seminarian, I can now see that there was very little formation in social doctrine and especially in market economics. I very much hope the new Patriarch may follow the lead of Pope John Paul II and encourage his Church to strengthen the cultural-ethical framework of society rather than intervene directly in the messy and at times dangerous realm of Lebanese politics. If Maronites could find a way to bridge the gap between the warring factions of Lebanon through dynamic commerce, it may have the possibility of helping pave the way for peace in one small but important part of the Middle East. I would love to see some basic economic education for seminarians towards this end, so that Lebanese entrepreneurs both inside and outside the country feel that their faith supports their normal activities and that their normal activities can and should be the place of their sanctification.

The old ways of businessmen leaving the country so that the politicians can ruin it is no longer feasible. I will be praying that Patriarch Rai finds new ways of addressing ancient problems for all of our sakes.

Hear Chuck Colson, Acton’s Michael Miller, Scott Rae, John Stonestreet, and others at the Doing the Right Thing conference on Saturday, May 7, 9am – 1pm, at Christ Church of Oak Brook, Ill. Preview a new ethics curriculum; explore issues of truth, morality, virtue and character; and learn how to educate others to discover the framework to distinguish right from wrong and begin doing the right thing. Cost is $25 (pastors and students free). To register, visit this link.

This event is part of a nationwide tour to preview a six-part curriculum produced by the Chuck Colson Center for Christian Worldview, “Doing the Right Thing: A Six-Part Exploration of Ethics.” This DVD-based series and the live tour events explore topics such as How did we get into this mess?; Is there truth, a moral law we can all know?; If we know what is right, can we do it?; What does it mean to be human?; Ethics in public life; and Ethics in the marketplace.

Event participants will preview extended clips from the video series, hear presentations from leading experts on the topics, and have the opportunity to pre-order the DVD series at a special advance rate in order to begin with others conversations on ethics, morality, virtue, character, truth and issues of right and wrong.

Co-sponsors for the event include the Acton Institute, BreakPoint / Chuck Colson Center for Christian Worldview, WMBI / Moody Radio and WYLL-AM.