Archived Posts 2011 - Page 7 of 56 | Acton PowerBlog

Blog author: kspence
Friday, November 11, 2011
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Last week the Acton Institute hosted its third annual Chicago Open Mic Night downtown at the University Club. Three panelists answered questions about — you guessed it — economics and a virtuous society from the audience.

Acton executive director Kris Alan Mauren emceed the event, and our president Rev. Robert A. Sirico was the first panelist. Heather Wilhelm, a senior fellow at the Illinois Policy Institute and a columnist for RealClearPolitics.com, and Brian Wesbury, chief economist at First Trust Advisors and a frequent guest on Fox, CNBC, and Bloomberg TV, rounded out the panel.

The general theme of the night was something like, “how do we get the economy going again?” The panel’s general answer was optimistic: “It already is — just keep government out of the way.”

Mr. Wesbury was back after his popular commentary last year, and he delivered again this year: the last questioner got a friendly-but-stern talking-to after asking how the U.S. economy could possibly keep chugging along after the blows it has been dealt since 2008.

Whether the question was about the role of the Federal Reserve, the desirability of continued stimulus, or presidential candidates’ tax policy, the panelists generally agreed: the parts of the economy that government (particularly the Federal Government) hasn’t tried to help are doing much better than sectors like housing where sophisticated Keynesian policy instruments have been brought to bear.

Wilhelm quoted H.L. Mencken to great effect: “The urge to save humanity is almost always a false front for the urge to rule it.”

The task for current generations, Sirico said, is to learn from the failures of the baby boomers and to take up wholeheartedly the task of rejuvenating the culture, and he sees in the Tea Party, in homeschooling movements, and in a return to traditionalism, signs that that moral rejuvenation is happening.

Special thanks to Mr. Jim Healy (center, with guests)

Open mic night as it happened

For our air superiority, which by the end of 1944 was to become air supremacy, full tribute must be paid to the United States Eighth Air Force. – Winston S. Churchill

The young pilots and crews that took to the skies to defend democracy and liberate a continent are among the most committed and courageous to ever serve this country. When the United States entered the war, it was the greatest Air Armada to ever be assembled. However, most pilots and crews before their training had never flown before. Many of them came from small towns and farms. They were extremely bright and well educated. Most importantly deep courage was needed for early missions that resulted in an 80 percent casualty rate for the crews of the Mighty Eighth in the early stages of the war. Their commitment to a free Europe was tested by horrific experiences and mental and physical anguish. There were no foxholes in the skies, nowhere to hide, only the duty to carry out the mission and deliver the bombs amid a sky littered with enemy fighters and flak. “Perhaps at no other time in the history of warfare has there been been such a relationship among fighting men as existed with the combat crews of heavy bombardment aircraft,” says Starr Smith, former Eighth Air Force intelligence officer.

The British, who abandoned daytime bombing in World War II because of the extremely high casualties, saw their American ally step in so that Germany and its war machine would be bombed virtually around the clock. Donald L. Miller sums up just how dangerous the air war over Europe was in his book Masters of the Air: America’s Bomber Boys Who Fought the Air War Against Nazi Germany,

In October 1943, fewer than one out of four Eighth Air Force crew members could expect to complete his tour of duty: twenty-five combat missions. The statistics were discomforting. Two-thirds of the men could expect to die in combat or be captured by the enemy. And 17 percent would either be wounded seriously, suffer a disabling mental breakdown, or die in a violent air accident over English soil. Only 14 percent of fliers assigned to Major Egan’s Bomb Group when it arrived in England in May 1943 made it to their twenty-fifth mission. By the end of the war, the Eighth Air Force would have more fatal casulaties -26,000- than the entire United States Marine Corps. Seventy-seven percent of the Americans who flew against the Reich before D-Day would wind up as casualties.

Below is a tribute video of The Mighty Eighth and links to past Veterans Day posts:

Veterans Day Review: As You Were

Veterans Day: E.B. Sledge and The Old Breed

Veterans Day: Remember Bataan & Corregidor

The Secretary of State was not pleased.

I couldn’t believe my ears. But today I can.

Sandro Magister, one of Rome’s most veteran and credible vaticanistas, confirmed this afternoon what I had heard – and feared – nearly two weeks ago (See his Nov. 10 editorial “Too Much Confusion. Bertone Puts the Curia Under Lock and Key” ): The Pontifical Council’s controversial Note released two weeks ago “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority” really had not been independently reviewed by the Church’s highest authorities.

The Note, of a very particular worldwide interest, rocked the boat of the Vatican approval system.

At the Vatican Press conference held to debrief international reporters on its Note, the Council’s two highest authorities – President Cardinal Peter Turkson and Secretary Bishop Mario Toso – openly admitted that neither the Pope or any other senior Curial officials had approved or necessarily read the Council’s bold public statement.

It was their Council’s statement. They took full responsibility for recommending a world financial authority and global Tobin tax to stabilize the most destructive financial storm in nearly a century.

The Note was not – and still is not – undersigned by His Holiness Benedect XVI.

Ibidem for Secretary of State Cardinal Tarcisio Bertone, the Vatican’s second in command.

And now Cardinal Bertone is upset, taking corrective action to prevent this fiasco from ever happening again – especially regarding the release of an opinion of such relevance and sensitivity to the world’s well being.

As Sandro Magister reported:

In the hot seat was the document on the global financial crisis released ten days earlier by the pontifical council for justice and peace. A document that had disturbed many, inside and outside of the Vatican.

The secretary of state, Cardinal Tarcisio Bertone, complained that he had not known about it until the last moment. And precisely for this reason he had called that meeting in the secretariat of state.

The conclusion…was that this binding order would be transmitted to all of the offices of the curia: from that point on, nothing in writing would be released unless it had been inspected and authorized by the secretariat of state.

Finally, it has now become ever the more apparent that the practical prescriptions of the Note were not that of any religious professional. The marked economic language and financial terminology implied all along that a Vatican outsider had crafted the Note’s technical recommendations.

As Magister further writes:

On October 22, a further notification added the name of Professor Leonardo Becchetti to the ticket of the presenters [at the press Conference held on Oct. 24. See translation of his remarks].

Becchetti, a professor of economics at the University of Rome Tor Vergata and an expert on microcredit and fair trade, is believed to have been the main architect of the document.

And in fact, at the press conference presenting the document on October 24, his remarks were the most specific, centered in particular on calling for the introduction of a tax on financial transactions, called a “Tobin tax” after the name of its creator, or a “Robin Hood tax.”

What is next? A sequel or redraft of the Council’s Note on global financial and monetary reform? Let’s just say, it will not be any time soon.

An Italian friend of mine recently complained to me while painfully witnessing the climax of the Italian debt crisis: “Cosi Berlusconi, cosi l’Italia!” (As with Berlusconi, so too with Italy!).

My friend’s comment was an allusion to the Italian Prime Minister’s personal responsibility in dragging the entire Italian nation down with him. News broke late on Wednesday that Berlusconi had agreed to step down from office, as he effectively admitted his 17 years of political power had done nothing more to fix a broken system and as more members of his loose PDL coalition defected to centrist parties.

Even with the likely passing of the European Union fiscal reform measures designed to control Italy’s reckless public spending, it all seems too little too late.

With Berlusconi’s suprise announcement and Italy teetering on national debt default, the European stock markets tumbled late Wednesday. Logically, my friend then said, “Vedi? E cosi anche l’Europa” (See? And so too with Europe).

The domino effect is becoming a real potential. It is frightening. It is downright disturbing for anyone living and trying to survive in Europe. Still, we have to be careful of where we start pointing fingers.

My friend’s Berlusconi = Italy = Europe linear equation is not necessarily totally inaccurate.

The Italian Premier actually deserves some of the blame. For instance his center-right coalition government did recently raise capital gains taxes (from 10 to 20%!) along with corporate, personal income and VAT. This has further scared off the few serious local and foreign investors left in Italy and has sparked greater passion for the national pastime: tax evasion. This is the worst time to be raising taxes when economic growth is so wobbly at home. Berlusconi is an entrepreneur himself. He should know better. It is a total mystery why his business-friendly government is caving into Keyensian economic rebuilding.

All said, Italy and Europe is not a one-man disaster. Nor even a one-party disaster.

Italy’s national debt crisis is, above all, a crisis of national character – an Italian character that has become softened while shedding off its once great virtues of resilience, fortitude, integrity, self-reliance and innovation, just as we have seen in a paradigmatic shift in character with the rise of the modern Western European welfare states (watch Acton Media Director Michael Miller’s Acton Lecture – The Victory of Socialism, where he explains why socialism counts on citizens’ progressive external dependency on institutions and a loss of personal virtue).

France, Spain, Britain Germany Greece, Portugal, Belgium, Denmark. Take your pick: all have lost many of these same virtues of character in varying degrees. The Great Generation of post-World War II Europe is now too old to play the part of come-back hero.

No matter how great a vision or “business plan” the entrepreneurial Berlusconi had for Italy since the mid-1990s, no amount of collective cultural effort was ever possible when his country and Continent has lost its spirit of freedom and independence from big government and generous public programs.

National debt, while symptomatic of unsuccessful political regimes, is more the result of a national deficit of values and virtue.

Director of Research Samuel Gregg’s thoughts on the debate are up at The Corner. He sees a parallel between the Italian crisis unfolding across the ocean and the problems facing the United States — particularly in Michigan, where this debate was held. The collapse of Italy would certainly be a dramatic illustration of the shortcomings of crony capitalism, and Gregg thinks a candidate could find a majority of voters who don’t want that to happen.

With the Italian-flavored shadow of the European Union’s ongoing financial implosion overhanging the United States, it was expected that America’s own fragile economic state would be front-and-center at this debate.

This time, however, there was less argument among the GOP candidates. Instead, there were far more direct critiques of (1) President Obama and (2) the pattern of crony capitalism with which more and more Americans are visibly losing patience. The debate’s setting — the state of Michigan — is a living exemplar of all the fallacies of bailouts and business-union collusion, as well as a failure to promote the type of innovation that produces wealth but that also threatens businesses (like the Detroit car companies) that don’t like competition.

Also noticeable was the increased willingness of the candidates to advocate market solutions to any number of problems, the most prominent being America’s ongoing mortgage farce, the looming crisis of student debt, and the inexorable rise in health-care costs. That’s a welcome development. If this trend keeps up, maybe one of them will make the dismantling of crony capitalism a central plank of his platform. That won’t please the likes of General Electric and the City of Chicago, but there are surely votes there.

“You’ve lost a good opportunity to shut up.” So said French president Nicolas Sarkozy to UK prime minister David Cameron as an instance of what BusinessWeek has dubbed “Europe’s Insult Diplomacy.” But it’s a retort that strikes me as equally relevant for the pontifications that pour forth from ecumenical officials in Geneva on almost every topic under the sun.

The latest instance of imprudence in the cause of desperately seeking relevance is the claim from Rev. Setri Nyomi, general secretary of the World Communion of Reformed Churches (WCRC), that the reformer John Calvin “would have been in the streets of New York or London with a placard,” joining the Occupy Wall Street movement.

I explore the dynamics of what I call the “ecumenical-industrial complex” in my book released last year, Ecumenical Babel: Confusing Economic Ideology and the Church’s Social Witness. One of the points I make in the book is that ecumenical officials like Nyomi cannot seem to resist the opportunity to weigh in on contemporary political and economic issues as if there is a single, univocal, and absolute Christian position.

The claim that Calvin and OWS are kindred is precisely the kind of obfuscatory rhetoric that we don’t need from ecclesiastical representatives, whether at the congregational, denominational, or ecumenical level. On the constructive side, in Ecumenical Babel I make the case that the ecumenical movement, rather than making absurd claims akin to that of Calvin and OWS, might “decline to issue doctrinaire and casuistical proclamations about this or that particular policy. Instead, the ecumenical movement would understand its role in this sphere to provide broad guidance rather than particular judgments.”

The upshot of such a change would be that “the ecumenical movement’s social witness would place correspondingly less emphasis on direct political engagement and advice…and correspondingly greater emphasis on providing moral guidance to the church.” As opposed to saying that JC (whether John Calvin or Jesus Christ) “would have been in the streets of New York or London,” as Nyomi claims, instead “the character of ecumenical statements on social issues…would be far more restrained and chastened than we find today.”

But as long as the mainline ecumenical movement continues to conflate unity with unanimity on particular social questions, don’t expect reform to happen anytime soon.

Mike Huckabee campaigns in Auburn Hills, Michigan (2008)

Many pundits have said that in recent American history the presidential candidate who has made the most references to God went on to win the election. There may be truth to the theory and already many candidates have rushed to highlight their faith for the electorate. President Barack Obama has utilized the “God talk” too for the upcoming battle. Last week he declared God wants to see the jobs bill passed.

Religion first played a notable role in the presidential election of 1800. In a rematch of the John Adams and Thomas Jefferson race , Federalist allies of Adams accused Jefferson of being “a howling atheist and an infidel.” In the 1980 presidential election, the Jimmy Carter campaign asked Ted Kennedy to attack Ronald Reagan as “anti-Catholic.” Kennedy, of course, dismissed the request out of hand.

If you are in Grand Rapids this Thursday, come here many more anecdotes from presidential campaigns and religion at Derby Station. We will discuss some of the presidential elections where faith was a major issue, such as 1960. In that race, America saw the first and only Catholic elected to the presidency. And is there a better place to discuss how prohibition played into anti-Catholic biases than a pub?

I will offer a short lecture, but this is primarily a discussion so come ready to contribute your own thoughts about religion and presidential campaigns. For all the details, here is the Acton event page and there is a Facebook page for this Acton on Tap as well.

In a recent article in the Washington Post, Juan Forero and Michael Birnbaum recommend that in the face of the looming specter of Greek debt default, Europe may learn a few lessons from South America. In particular, they point to the good example of Uruguay and the bad example of Argentina.

According to the authors,

In a story that may provide a lesson for Europe, one country, Uruguay, that was on the edge of financial oblivion organized a fast, orderly and negotiated response that revived the economy and ended a run on banks. Another, Argentina, spiraled into a chaotic default and remains a pariah in world financial markets.

The article lists a variety of reasons, such as tax evasion, political stagnation, and civil unrest, with regards to why Greece is in danger of becoming the next Argentina. There is one aspect, in particular, though, that sheds some interesting light on current monetary practice. According to the article,

Greece is hamstrung by its ties to the euro, which it cannot devalue to make its exports cheaper, and leaving the currency zone might prove even more painful.

Though currency debasement has been possible since time immemorial, it has become easier ever since the “Nixon Shock” of 1971, when the United States ended its tie to the gold standard, affecting every other nation which had tied its own currency to the U.S. dollar for the sake of stability. However, from that point on, most countries have been operating with purely fiat-based currency; a government’s central bank can print as much or as little money as they desire, since its value has no stable grounding. (Grounding the dollar’s value to a specific amount of gold prevented the U.S. from printing more money than gold that it could be exchanged for.)

In a recent article in the Journal of Markets & Morality, James Alvey highlights the analysis of James Buchanan on the ethics of public debt and default. With regards to default, Buchanan identified two common means: open default or concealed default through inflation. By inflating its currency, a country can, in effect, cheat its bondholders out of the amount promised to them by repaying its debts with debased money. To do so is effectively concealed default. Notably, Alvey writes, “Buchanan says that the U.S. government did ‘default on a large scale through inflation’ during the 1970s,” the very decade in which we left the gold standard.

What is fascinating about the current crisis with Greece is that its central bank does not have sole control of the euro. Despite being a fiat currency, its decentralized nature gives it a certain stability.  Concealed default is not an option for Greece, forcing it to make the hard decisions necessary to avert defaulting on its debt or to do so openly.

For more on the history and moral implications of currency debasement, see Juan de Mariana, Treatise on the Alteration of Money, recently translated and published by Christian’s Library Press.

Blog author: jballor
Wednesday, November 9, 2011
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In this week’s commentary, I draw on some of the insights contained in the forthcoming translation of a section of Abraham Kuyper’s work on common grace, Wisdom & Wonder: Common Grace in Science & Art, to discuss the relationship between work and the natural world after the fall. (You can pre-order Wisdom & Wonder today and be among the first to get the book when it is released next week.)

I found especially pertinent the insights offered by a Michigan fisherman Ed Patnode, who describes his entrepreneurial turn into the charter fishing business:

He decided to start running a charter boat about six years ago. Back then, he used to go fishing every weekend with a group of friends.

“It got to be expensive each weekend going. And so we were just trying to see ‘Hey, how can we cut our losses.’ It was really, really how do we get out there and get other people to help us pay?” (laughs)

And with a lifetime of experience, maybe even obsession, with catching fish, he certainly knew enough to do it.

The bit I used in this week’s commentary, “Work, the Curse, and Common Grace,” is what Ed says next:

But as much as he knows about fish, there’s still more he wishes he could know.

“You know we’d be rich if we could tap into the mind of a fish, just get that fish to talk and tell us why do you like pink, or can you tell us what days you’re going to bite pink on and what other factors are influencing your decision to bite this pink lure today.”

I bring in Kuyper’s musings about how this kind of insight into the nature of animals was something we lost in the fall. Common grace works to provide us with some way to learn about things in this world, so we are not completely blind or helpless. But even so, things are not the way they were or the way they will be after the Christ’s return and the consummation.

This is a perfect occasion to tell my own “big” fish story. As a boy I would visit my dad and step-mother during the summers here in Michigan, and my step-mom’s family had a cottage on a small lake. Early one morning my dad and I took the small rowboat out to the other side of the lake, where the mist was still coming off the water. As we neared the other shore, I readied my first cast of the day. As soon as it hit the water, BANG! I got a hit.

I was so excited, but I didn’t really know what to do, but I remember working that fish back and forth to the boat. It seemed like it took forever, and my arms sure were tired. But when we hauled that fish in I couldn’t believe it. It was a 4.5 pound largemouth bass, somewhere in the range of 20″, as I recall. I was so happy that I wanted to head right back in and show everyone. Wiser heads prevailed, as it was still very early in the morning and no one else was awake. Even so, as far as I was concerned my fishing day was done after that first cast, and I probably scared all the other fish away with the excited tapping of my legs, waiting for time to pass so we could go back with the fish. To this day that’s the best fish I ever caught.

The Center for American Progress (CAP) has boldly rebutted the arguments of our own Kishore Jayabalan, director of Istituto Acton, concerning the Vatican’s note on a “central world bank.” It has done so by showing him to be lacking in “respect for the inherent dignity of human life.” … Yes, we are talking about that Center for American Progress.

In a feature on their website that purports to tie last month’s Vatican note to the Occupy Wall Street movement, CAP offers this smarmy response to the analysis Jayabalan gave.

Some conservative Catholic commentators are not as supportive, however….

Kishore Jayabalan of the conservative Catholic Acton Institute said that the note’s appeal to an international authority contradicts the church’s teaching that problems are best solved starting at local levels of authority, also known as the doctrine of subsidiarity.

What these conservatives are missing is that the note draws heavily from the tradition of Catholic social teachings on justice and respect for the inherent dignity of human life. This is where the Occupy movement finds an ally.

CAP has one-upped us doctrinally: where Jayabalan is concerned with minor theological nuances like the doctrine of subsidiarity, their minds are fixed on higher principles like respect for human dignity, the most immediate threat to which is the great and terrible free market.

“At heart, it is a moral enterprise,” say CAP’s Jake Paysour about Occupy Wall Street. Yes, except at the hearts of its camps, where women dare not go because their human dignity is respected only as much as strong men find it convenient.

CAP’s record on human dignity speaks for itself. Its position on the lives of unborn children, for example, could not be any more out of line with Catholic teaching on “justice and respect for the inherent dignity of human life.” It is shocking that CAP even uses those words: the suggestion that they give one hoot about Church teaching on human dignity is nonsense.

I will resist the temptation of a GetReligion-style dismantling of the feature, since it would sail right over their heads at CAP, but I must point out that the Church’s principles of social justice were not “set forth 80 years ago” in Quadrogesimo Anno, as the author claims, but rather 40 years before in Rerum Novarum (hence the second encyclical’s name — not that we should expect anyone there to have any Latin). I don’t mean to make an ad hominem argument, but if you can’t get that right, what are you doing trying to explain the relative weights of principles first explicated in Rerum Novarum?

In the future: If you’re going to use the words of an Acton Institute expert, it is expected that you will avoid the shameless contortion of facts and logic that CAP indulged in today.