Posts tagged with: economics

On Friday afternoon, Acton Institute President Rev. Robert A. Sirico joined Neil Cavuto on Fox News Channel to discuss the notable lack of outrage on the part of the media in response to the slaughter of Christians by terrorist organization ISIS.

Yesterday, Acton’s Director of Research Samuel Gregg made an appearance on Relevant Radio’s The Drew Mariani Show to discuss Pope Francis’ recent comments calling money “the dung of the devil,” setting them in their proper context and discussing the Pope’s comments on cooperative organizations as well. You can listen to the interview via the audio player below.

and112812blogNear the top of the list of things I despise is companies that take advantage of the plight of the poor and desperate. But just above that on my list is something I hate even more: being poor and desperate. That’s why I loathe payday lending companies that charge usurious interest rates—and why I’m not yet ready to see them abolished.

Here’s how payday lending works. If you have a job (and pay stub to prove it), a payday lending company will allow you to write and cash a post-dated check. For this service the company will charge an absurd interest rate. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. So if you need $100, you write the check for $115 and they’ll give you $100 in cash. Two weeks later they cash your check or you can renew or “rollover” the amount—for an exorbitant fee.

Why would anyone agree to such terms? Because they have no other choice. About twenty years ago I made some terrible choices and found myself in a serious financial bind. The amount I needed wasn’t much—about $200—but without it I wouldn’t have been able to pay my rent. I took out a payday loan that cost me $30 every two weeks. It took about eight weeks to get clear of the loan, resulting in a cost of $120 to borrow $200 for two months.

If you’re middle class and think of it in terms of interest rate, that repayment cost sounds appalling usurious. And it is. But as the poor will tell you, man does not live on APR alone. Having to pay an extra $120 was cheaper than having to find a new place to live. Yes, it was a bad deal. But it was better than all my other choices.

That is why I believe every serious critique of payday lending needs to be accompanied by a serious proposal to help those who are trapped by such “poverty problems.” An excellent example of an alternative approach is the one offered by Wesley Memorial United Methodist Church in Richmond, Virginia. One of their church members, Nina McCarthy, was initially trapped in the vicious payday lending circle:
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Marie Harf, U.S. Department of State

Marie Harf, U.S. Department of State

I do not believe Marie Harf is an eloquent speaker, but I did think her “jobs for ISIS” remarks made some sense. We know that in American cities, for instance, if young men do not have education and jobs, they get into mischief. The kind of mischief that includes gangs and drugs and violence. Why would we expect that young men in Libya, Iraq, and elsewhere would be any different?

Apparently, I’m not the only one. While others have sneered at Harf’s comments as being simplistic, a few are tentatively suggesting she is not as far off-base as first thought. The National Review‘s Tom Rogan says this: (more…)

primer-baptistI recently pointed to a helpful talk by Greg Forster to highlight how understanding economics is essential for developing a holistic theology of work, vocation, and stewardship. Economics connects the personal to the public, and prods our attentions and imaginations to the broader social order. In doing so, it alerts us to a unique and powerful mode of Christian mission.

In his latest book, Flourishing Faith: A Baptist Primer On Work, Economics, And Civic Stewardship, Chad Brand expands on this point, listing five reasons why pastors and seminaries (and thus, lay people) would do well to dig deeper into the realm of economics. (The following titles are paraphrased summaries, with the corresponding text pulled directly from Brand.)

1. The Bible Deals with Economic Issues

First, the Bible deals with economic issues…It addresses matters of stewardship of our world (Gen. 1–3; Gen. 9:1–7), of God’s ownership of creation (Matt. 6:25–30; Col. 1:16–20), and of economic shalom (Lev. 25:1–55; Acts 2:42–47; 2 Thess. 3:6–10), and other important issues given more detailed discussion in [this book].

2. Economics Helps Us Understand the Public Square

Second, an understanding of economics and especially of political economy can help us understand what is going on in the world around us. The general election…is impossible to follow without some understanding of the implications of Obamacare and its impact on Medicare, the federal deficit, and the long-term effects of continued deficit spending. The posturing on the part of Republicans and Democrats sometimes seems like little more than rhetoric, but the one who understands what is really at stake can help lead people to a better understanding of their responsibility in the public square.

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unbalanced“The bottom half of the world’s population owns the same as the richest 85 people in the world.”

The stat was quoted last month in a report by the development organization Oxfam, but similar claims have become common. You’ve probably seen this statistic—or one like it—before in articles about economic inequality and assumed they must be somewhat true.

But they aren’t. In reality, they are completely meaningless.

One of the problems is that the comparisons are based on net worth (assets minus liabilities). If you aggregate all the people who have a negative net worth into one category and call them the “bottom half” then you come up with some peculiar conclusions. As Felix Salmon says, “My niece, who just got her first 50 cents in pocket money, has more money than the poorest 2 billion people in the world combined.”
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UnemploymentSeries Note: Jobs are one of the most important aspects of a morally functioning economy. They help us serve the needs of our neighbors and lead to human flourishing both for the individual and for communities. Conversely, not having a job can adversely affect spiritual and psychological well-being of individuals and families. Because unemployment is a spiritual problem, Christians in America need to understand and be aware of the monthly data on employment. Each month highlight the latest numbers we need to know (see also: What Christians Should Know About Unemployment).

Positive news is marked with the plus sign (+) while negative employment data is marked with a minus sign (-). No significant change is marked by (NC).
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primer-pentecostalIn the latest Journal of Markets and Morality, Joseph Gorra reviews Dr. Charlie Self’s new book, Flourishing Churches and Communities, calling it a “joyous, practical, and insightful primer to the integration of ‘faith, work, and economics” that will inspire “a pathway for leaders of Pentecostal thought to reflect on public life in a renewed way.”

The book is one of four tradition-specific primers from the Acton Institute, and although it focuses specifically on a Pentecostal perspective, Gorra rightly observes that Self writes in a way that draws wide appreciation for the work of the Spirit in economic life. Avoiding “provincial understandings” of Pentecostals themselves, Self is careful to present Pentecostalism in a “nontriumphalistic manner,” Gorra writes, which mainstream evangelicals may find “accommodationist to many of their own theological sensibilities.”

As an example, the book seeks to highlight and illuminate five key principles, which on their face fit rather snugly within these discussions across Christianity as a whole:

  1. Work is good.
  2. Although sin has effaced human nature and work, it has not erased the divine nature in people and the ability to bring good to the world.
  3. God has reconciled the world to himself in Christ and is now working through the church to express the life of the kingdom in the present age.
  4. God the Holy Spirit actively energizes compassion for the poor and wealth creation for community flourishing.
  5. Cultural, economic, and social institutions are built on transcendent moral foundations.

As Gorra duly notes, numbers 4 and 5 are perhaps the most distinctly Pentecostal, demonstrating where Pentecostalism may offer its most distinct contribution to such matters: (more…)

School-Desks--Empty-Classroom--GENERIC-HD--1-9-09---18449637Back in October I offered five guidelines on “how to be a better guesstimater,” ways to hone your skills at guessing and estimation — guesstimation — that will help us minimize innumeracy.

A recent Washington Post article—“Majority of U.S. public school students are in poverty”—shows how applying these five tips could prevent people from falling for obviously inaccurate reporting. Here is the main claim of the article:

For the first time in at least 50 years, a majority of U.S. public school students come from low-income families, according to a new analysis of 2013 federal data, a statistic that has profound implications for the nation.
The Southern Education Foundation reports that 51 percent of students in pre-kindergarten through 12th grade in the 2012-2013 school year were eligible for the federal program that provides free and reduced-price lunches. The lunch program is a rough proxy for poverty, but the explosion in the number of needy children in the nation’s public classrooms is a recent phenomenon that has been gaining attention among educators, public officials and researchers.

Are those numbers accurate or even plausible? Let’s see how we could apply the tools of guesstimation to this claim.
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socialmobility-121One of the most important important socio-economic factors in America is also one of the least talked about: social mobility.

Social mobility is the ability of an individual or family to improve (or lower) their economic status. The two main types of social mobility are intergenerational (i.e., a person is better off than their parents or grandparents) or intragenerational (i.e., income changes within a person or group’s lifetime). While there is no truly adequate gauge to measure such opportunities, we can get a fair estimate based on measurements of social mobility.

And by that measure, African Americans are fairing poorly. The Brookings Institute recently highlighted three disturbing facts about the social mobility of black Americans:
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noun_86179_ccToday at Think Christian I reflect on President Obama’s State of the Union message last night. I think it was perhaps the best speech I have heard him give in terms of delivery and general tone. There are numerous things that one might quibble with in a speech of that length, of course.

My TC piece is an attempt to help us to put into proper perspective political promises and policy proposals. I look particularly at the question of economic inequality and the assumptions underlying the government’s redistributive actions.

As Danielle Kurtzleben puts it, “Obama is making a case that the economy’s distribution engine is broken, and that the recovery simply won’t fix it. His solution is for government to approach redistribution as a positive good rather than a necessary evil.”