Posts tagged with: Business/Finance

“Despite the mounting cost and swelling debt,” notes Laura Prejean in this week’s Acton Commentary, “America’s demand for education, particularly higher education, has not decreased, defying typical market expectations.”

This is what economists call inelastic demand, when people continue to buy a good or service regardless of an increase in prices. Though the post-recession job market is still difficult, growing student debt ought not to lead us to forget the dignity — and responsibility — of each individual student. When prices for goods and services rise, consumers often make sacrifices and adjust their spending. For example, as gas prices rise, families use carpooling or more efficient routes to and from the grocery store. But what are students sacrificing when they join the immovable market for education? Are they considering less costly options with lower tuition, or do they unthinkingly take out student loans, falling into serious debt as they enter their twenties?

The full text of the essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

t873In a 5-4 decision, the Supreme Court just announced its ruling in favor of Hobby Lobby, holding that, “as applied to closely held corporations, the government’s HHS regulations imposing the contraceptive mandate violate the Religious Freedom Restoration Act of 1993 (RFRA).” The full opinion, written by Justice Samuel Alito, can be read here.

Although there is still much to digest, and although the majority opinion still leaves quite a bit of room for related battles to continue, it’s worth noting that that whatever perceived “narrowness” we see in the decision — confining things specifically to closely held corporations — remains a significant victory, particularly given our culture’s prevailing attitudes about business.

According to HHS, by simply incorporating one’s business in the pursuit of profit — “without in any way changing the size or nature of their businesses” — a company “would forfeit all RFRA (and free-exercise) rights” (quotes from Alito’s paraphrase). The arguments supporting such a view vary, including the principal argument advanced by HHS that corporations cannot “exercise religion.”

Alito dissects this from a variety of angles, and does so rather compellingly. But one of the more noteworthy sections is his refutation of the notion that for-profit corporations aren’t protected by RFRA because they “simply seek to make a profit.” (more…)

In 1820, America’s per capita income averaged $1,980, in today’s dollars. But by 2000, it had increased to $43,000. That economic growth has benefited the rich, of course. But it has also transformed the lives of the poor — and prevented many more from becoming or staying poor.

In this superb short video, the American Enterprise Institute briefly explains the moral value of economic growth.

offering-plateDespite the struggling-to-recover economy, charitable giving by Americans continues to rise. But a smaller proportion of this money is going to religious organizations.

According to a newly released report by Giving USA, total estimated charitable giving in the U.S. rose 4.4 percent between 2012 and 2013, to $335.17 billion in contributions. The single largest contributor to the increase in total charitable giving was an increase of $9.69 billion in giving by individuals. In 2013, per capita giving by U.S. adults reached $1,016, and average U.S. household giving reached $2,974.

Giving increased for three of the four sources of giving. Only giving by corporations declined slightly in 2013, notes Tom Watson of Forbes, because of the slow rate of growth in pre-tax corporate profits in 2013, at 3.4 percent.

Unfortunately, charitable contributions to religion continue to slow. The report attributes this to the result of declining religious affiliation and attendance and religious-oriented charitable organizations categorized within other subsections.

But as The Economist points out, the sharp overall rise in charitable giving has been driven by the very rich, who tend to favor secular charities:
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starbucksWhen most people think of Starbucks they think of overpriced coffee, free wifi, and omnipresence. Starbucks are everywhere. The company was founded in 1971 and since 1987 they’ve opened an average of two new stores every day. In the U.S. alone there are 12,973 locations.

When most people think of “big business”, though, they don’t often think of the Seattle-based coffee company. But they should. Starbucks has 151,000 fulltime employees, $15 billion in annual revenues, and three times as many locations as Walmart. Starbucks is one of the biggest of big businesses. And, not surprisingly, a big proponent of cronyist policies.

Cronyism occurs when an individual or organization colludes with government officials to create legislation or regulations that give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace. A prime example is minimum wage laws. Almost without fail, big businesses tend to support higher minimum wages.

Since they could just choose to pay higher wages, why would they support federal mandated wage floors? One reason is because it helps to eliminate the competition from small business who don’t have the size and scale to absorb higher-than-market wage increases.

In a recent interview with CNN, Starbucks CEO Howard Schultz said he supports an increase to federal minimum wage even though he admits the $15 wage in Seattle could have “traumatic effects” on small business owners and employees.
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briberyThere’s an old saying that corruption is authority plus monopoly minus transparency. That combination makes state-level governments especially prone to the temptations of corruption.

A new study in Public Administration Review, “The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending,” looks at the impact of government corruption on states’ expenditures. Defining corruption as the “misuse of public office for private gain,” the authors of the paper note that public and private corruption can have a range of negative effects, including lower-quality work, reduced economic productivity, and increased poverty.

According to Leighton Walter Kille, the researchers explored two possible theories: First, higher levels of corruption should cause states’ spending levels to be higher than they would be otherwise. Second, corruption would distort states’ spending priorities in ways that favor bribes from private firms and others. Some of the findings include:
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Well, how did I get here?

Well, how did I get here?

File under allegory: An Austin, Texas, resident whose property tax bill has her “at the breaking point.” As noted by Katherine Mary Ham at HotAir, the resident in question, Gretchen Gardner, deems the $8,500 bill for which she’s on the hook a wee tad cumbersome. “It’s not because I don’t like paying taxes,” she said. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”

According to Ham, Ms. Gardner purchased a 1930s bungalow more than 20 years ago, and the artist apparently can’t understand why her tax bill is so high. In this regard, Ms. Gardner resembles the Nuns on the Bus and other religious shareholder activists who submit proxy shareholder resolutions on a plethora of feel-good (but, in reality, harmful) agenda items through investment groups As You Sow and the Interfaith Center on Corporate Responsibility.

Similarly, voters in Acton’s Grand Rapids, Mich., front yard have approved a $10 million income tax increase, seemingly unaware of how this additional burden will impact the city and its residents negatively. Oh wait, did I forget to mention the $30 million parks millage approved by voters last year? While we’re at it, let’s toss in the 2011 mass transit millage approval, which will top out at $15.6 million annually. One day, however, Grand Rapids taxpayers may wake up like some allegorical David Byrne character, tapping their arm and asking, “Well, how did I get here?” as they ponder how much less money they take home, save or have available for philanthropic activities. (more…)