Posts tagged with: Business/Finance

Is spartan austerity driving us over the fiscal cliff?

The latest step in the budget dance between House Republicans and the White House has to do with where tax increases (or revenue increases in general, depending on what is called what) fit with a deal to avoid the so-called “fiscal cliff.” As Napp Nazworth reports, President Obama has apparently delivered an ultimatum: “there would be no agreement to avert the ‘fiscal cliff’ unless tax rates are increased on those making more than $250,000 per year.”

On one level it seems reasonable to talk about addressing a deficit from both directions: cutting spending and raising revenue. But as Ray Nothstine put it so well earlier this week, without some structural (and cultural) changes to the way Congress works, it would be insane to think that giving politicians more money is going to change how they spend it. One definition of insanity is doing the same thing over and over again and expecting a different result. Historically “politicians spend the money as fast as it comes in – and a little bit more.” Without some kind of balanced budget agreement, something with real teeth, why should we think things will be any different this time around? (I’ve talked about a more promising “both/and” budget solution before.) As Ray and I have concluded elsewhere, “In the case of the federal spending, the government has proved to be untrustworthy with very much. It’s time to see if the politicians in Washington can learn to be trustworthy with less.”
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Over at Christianity Today, HOPE International’s Chris Horst, whose article on a Christian manufacturer was recently highlighted at the PowerBlog, focuses on yet another Christian business, this time dealing in mattresses:

“This is one of the sleaziest industries in the world,” says business owner Ethan Rietema. “Customers are treated so poorly. Stores beat you up, trying to get as much money as they can, but they couldn’t care less if you get the right bed.”

Rietema and Steve Van Diest, both former campus ministers, are bringing rest—and integrity—back to a business largely devoid of it. Four years ago, a Christian entrepreneur invited the Colorado natives to begin deploying their relational abilities in strip malls rather than on college campuses. They now co-own three Urban Mattress stores in Denver and have franchised four more. And, they argue, their current work is just as important as their former ministry….

…”I don’t have to do mental gymnastics with the product I sell,” Van Diest says. “It’s not a frivolous item. It’s not an image-conscious product. People come here after being worn down by horrible sleep, replete with aches and pain. If we can provide them with a small glimpse of grace for a third of their lives, that’s kingdom work. That matters to God.”

Every entrepreneur begins by identifying a need. For Rietema and Van Diest, it was better customer service and consumer information. Urban Mattress has grown its business by directly countering a status-quo industry environment of price misinformation, offering “consistent and fair prices that promote transparency and honesty.” No faux “blowout sales,” no shady product labeling, no overly hasty, overly pushy customer interactions.

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Washington Post columnist Robert Samuelson says everyone seems to understand that the private sector creates jobs. Everyone, that is, except the New York Times. Samuelson calls the Times’ decree of government job creation “simplistic” and that it has a “flat-earth quality”.

He explains that if the government adds jobs – expands government – it comes at taxpayer expense.

But if the people whose money is taken via taxation or borrowing had kept the money, they would have spent most or all of it on something — and that spending would have boosted employment.

Job creation in the private sector is mostly a spontaneous and circular process. People buy things they need and want. Or businesses and private investors take risks by investing in new products, technologies and factories. All this spending, driven by self-interest and the profit motive, supports more jobs. In a smoothly functioning market economy, the process feeds on itself. By contrast, public-sector employment grows only when government claims some private-sector income to pay its workers. Government is not creating jobs. It’s substituting public-sector workers for private-sector workers.

With knowledge of how the developing world struggles to create jobs, Juan José Daboub, former Managing Director of the World Bank, concurs: (more…)

Blog author: jballor
posted by on Monday, September 10, 2012

I thought this piece in BusinessWeek last month from Mark Oppenheimer was very well done, “The Rise of the Corporate Chaplain.” I think it profiles an important and under-appreciated phenomenon in the American commercial sphere. One side of the picture is that this is a laudable development, since it shows that employers are increasingly aware that their employees are not merely meat machines, automata whose value is only to be calculated in terms of material concerns, and that spiritual matters cannot simply be ignored or factored in as a variable included in the cost of doing business.

But this rise in corporate chaplaincy also reminds me of the comment by Walter Rauschenbusch (noted in this recent article from Hunter Baker) that “business life is the unregenerate section of our social order.”

If by some magic it could be plucked out of our total social life in all its raw selfishness, and isolated on an island, unmitigated by any other factors of our life, that island would immediately become the object of a great foreign mission crusade for all Christendom.

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Blog author: aknot
posted by on Wednesday, August 8, 2012

French President François Hollande has promised a 75% tax rate on those in his country who earn an annual salary above one million euros ($1.24 million). Not surprisingly, this number has struck fear into the hearts and wallets of quite a few of France’s top earners, including some who are contemplating leaving and taking their jobs with them. The New York Times has the story:

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them.

They also know of companies — start-ups and multinationals alike — that are delaying plans to invest in France or to move employees or new hires here.

The potential tax increase threatens to handcuff “les Riches” and, ironically enough, undercut France’s prized notion of egalité, taking with it liberté and fraternité, the remainder of the country’s tripartite maxim. In Hollande’s France, these principles may not apply to the wealthy.

Of course, Hollande’s tax initiative is sure to have some beneficiaries. No, not the poor or the middle class. The real winners? Well, they live on the other side of the border. Also from the Times:

“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.

“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”

The entire story reminds me of a passage from Rev. Robert Sirico’s latest book, Defending the Free Market: The Moral Case for a Free Economy. In a chapter titled “The Idol of Equality,” Sirico addresses the unsustainable nature of simple redistribution. Instead, business development and job creation are essential–and lasting–tenets of economic growth. From the book:

When most people picture the 1 percent and their wealth, what comes to mind is designer clothing and jewelry, yachts and limousines, mansions and penthouses—all sorts of alluring and attention-grabbing luxuries. Luxuries so distracting, in fact, that we tend to lose sight of the fact that most of the wealth of the wealthiest is invested. It is put to work in the businesses they own and manage, and in stocks and other financial vehicles that provide the capital for countless other businesses. These are the businesses that provide the 99 percent with the goods, services, and employment that they regularly enjoy and often take for granted.

Whether it’s a big automotive plant or a small bakery on the corner, a microchip manufacturer or a family farm, all businesses that produce goods and employ people are owned by someone. It’s businesses that make up most of the wealth of the 1 percent. Confiscating that wealth and giving it to the other 99 percent would mean shifting much of that wealth from investment and production to consumption, since the poor and middle class consume a far higher percentage of their income than the wealthy do. This sudden shift from investment and production to consumption would demolish the infrastructure that makes jobs, goods, and services possible.

Hollande would be wise to read Defending the Free Market. Doing so might save his nation and preserve liberty, equality and brotherhood in the process.

Blog author: mhornak
posted by on Tuesday, May 8, 2012

Is ‘fair’ trade really more fair or more just than free trade? Does fair trade create an unfair advantage that hurts the poor more than it helps? There are two different opportunities over the next few days where you can have the chance to explore this topic further.

Acton will be hosting Professor Claar for an online discussion tomorrow, May 9, at 6:00pm ET. In the AU Online session of his popular lecture Fair Trade vs. Free Trade, he will lead us through an analysis and comparison of arguments for and against both fair trade and free trade. Visit the AU Online website for more information and to register.

Also, Victor Claar’s ebook, Fair Trade? Its Prospects as a Poverty Solution, is FREE until Friday on Amazon Kindle. Visit the Amazon book page to download your copy today!

Work: The Meaning of Your Life“When conducting Business as Mission, the primary purpose has to be to expand the Kingdom of God,” said Joseph Vijayam, founder and managing director of Olive Technology, a Colorado Springs-based information technology services provider. “Profits and an increase of shareholder wealth are an important result of a solid business that is well executed and are essential for the survival of any business, but they need not become the very purpose for existence.”

Vijayam invites Christian business leaders to reflect on the place of profits in the context of Tax Day here in the US: “I am not challenging business owners to stop making profits, but instead to look at those profits in a completely new way.”

In a piece for Comment magazine last year, “Reforming Economics,” I argued, “For too long a view has held dominance that has portrayed profit as a purpose or end, rather than as a means or a consequence. That is to say, the pursuit of profit is acceptable when it is couched within the broader framework of and constrained by the norm of service of others.”
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On National Review Online, Acton Research Director Samuel Gregg reviews a new document from the Vatican’s Pontifical Council for Justice and Peace titled, “The Vocation of the Christian Business Leader.” This follows the PCJP’s controversial “note” on the global financial system issued in October. Gregg says the “Business Leader” document:

Though it doesn’t shy away from making pointed criticisms of much contemporary business activity — and there is much to criticize — the Note articulates, perhaps for the first time in the Catholic Church’s history, a lengthy and thoroughly positive reflection from a body of the Roman Curia about the nature and ends of business.

Unlike the October 2011 Note, this new document avoids grand theorizing about the nature of economic development throughout the 20th century. Nor does the Note lend itself to absurd claims that the Church is to “the left of Nancy Pelosi” on economic issues. Instead, this text’s analysis of life as a business leader is rooted in a sophisticated appreciation and application of the principles of Catholic moral and social teaching. It also reflects a background of solid natural law reasoning about what Benedict XVI has called “integral human development,” and recognizes the sheer diversity of forms assumed by business in the modern economy. To that extent, the Note reflects a very welcome (and much over-due) “bottom-up” rather than “top-down” method of analysis of life in business.

So what are some of the document’s key themes?

Read “In Praise of Business: A New ‘Note’ from Justice and Peace” by Samuel Gregg on National Review Online.

As I mentioned in my previous post, the Business as Mission (BAM) model has become a global phenomenon. As more Christians embrace BAM it is not only changing the lives of individual Christians but is helping to change, as Daniel Devadatta explains, the culture of business in India:
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Blog author: jcarter
posted by on Wednesday, March 21, 2012

Over the past decade the model of Business as Mission (BAM) has grown into a globally influential movement. As Christianity Today wrote in 2007, the phenomenon has many labels: “kingdom business,” “kingdom companies,” “for-profit missions,” “marketplace missions,” and “Great Commission companies,” to name a few.

But as Swedish business consultant Mats Tunehag notes, Business as Mission is not a new discovery—it is a rediscovery of Biblical truths and practices.
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