Posts tagged with: economics

Blog author: jsunde
Wednesday, May 20, 2015
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economicman (1)“As a social psychologist, I have long been amused by economists and their curiously delusional notion of the ‘rational man.’” writes Carol Tavris. “Rational? Where do these folks live?”

In a review of behavioral economist Richard Thaler’s new book, Misbehaving: The Making of Behavioral Economics, Tavris notes how economists are slowly beginning to see — or, one could argue, finally returning to the notion — that the discipline ought treat man as more than a mere robot or calculator.

“Researchers in this field are making up for lost time,” Tavris continues, “or perhaps realizing that they are social psychologists after all.”

As human beings who arrogantly and often wrongly consider ourselves “sapiens,” we simply don’t match the model of human behavior favored by economists, one that “replaces homo sapiens” (whom Mr. Thaler calls Humans) with “a fictional creature called homo economicus” (whom he calls Econ). “Econs do not have passions; they are cold-blooded optimizers,” he says. “Compared to this fictional world of Econs, Humans do a lot of misbehaving”—thus the book’s title.

The problem, Mr. Thaler argues, is that although economists “hold a virtual monopoly” on giving policy advice, the very premises on which that advice rests are deeply flawed. That is why “economic models make a lot of bad predictions”: some small and trivial, some monumental and devastating. “It is time to stop making excuses,” he admonishes his colleagues. Mr. Thaler calls for an “enriched approach to doing economic research, one that acknowledges the existence and relevance of Humans.” By injecting economics with “good psychology and other social sciences” and by including real people in economic theory, economists will improve predictions of human behavior, make better financial and marketing decisions, and create a field that is “more interesting and more fun than regular economics.” In that way, Mr. Thaler believes, economists will finally produce an “un-dismal science.”

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tppThe controversial Trans-Pacific Partnership (TPP), backed by many Republicans and President Obama, hit a snag Tuesday when key Democrats spoke out against the agreement.

What exactly is the TPP? It is a free trade agreement with 12 nations (including China and Japan) that purports to increase economic growth, jobs and free trade. However, there is much opposition in Congress.

Leading opponents of the measure in the Senate have pushed for additional protections for U.S. workers and address concerns about alleged foreign-currency manipulation by China that makes American products too expensive.

“It’s a betrayal of workers and small business in our communities to pass fast track, to put it on the president’s desk without enforcement  … and without helping workers,” Sen. Sherrod Brown, D-Ohio, told The Washington Post.

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weeping statueIf one decides to destroy the American Dream, there are a few steps that would be necessary.

  1. Put Big Government in charge. The average American can’t figure out his or her own dreams, let alone what it would take to make them a reality.
  2. Tell Americans that without the government, the American Dream is hopeless.
  3. Produce a lengthy document about the American Dream. Leave out the word “freedom,” let alone the idea of freedom.
  4. Let people know that “freedom” (without actually using the word) is quite harmful. Don’t worry, thought, Big Government will protect you.

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Vatican PopeKishore Jayabalan, Director of Istituto Acton in Rome, evaluates a new book on Pope Francis and the economy. The book, Papa Francesco: Questa Economia Uccide [Pope Francis: This Economy Kills], is written by two Italian journalists known for skirting the ethical standards for Vatican journalists. For that alone, Jayabalan does not hold their work in high esteem. Writing at Crisis Magazine, Jayabalan is curious as to the motives of authors Andrea Tornielli and Giacomo Galeazzi:

As I started reading Papa Francesco: Questa Economia Uccide, I began to wonder why two Italian journalists would set out to write a book defending the economic statements of an Argentine pope against his American conservative critics. What dog do they have in this fight? Or as the pope himself would say, who are they to judge?

Finishing the book, I still had those questions and many more, but I cannot fault the authors for attempting to ride the wave of global popularity Pope Francis is enjoying. It could have been an engaging subject if it were written with any sense of objectivity, journalistic balance, or even willingness to concede that the pope’s economics critics may have a point worth taking seriously. Alas, this is not the case.

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fight forRobert Reich seems to be a smart man. He served under three presidents, and now is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. His video (below) says raising the minimum wage is the right thing to do. Unfortunately, he gets it all wrong.

Donald Boudreaux of the Cato Institute notes a couple of errors in Reich’s thinking. First,

Ignoring supply-and-demand analysis (which depicts the correct common-sense understanding that the higher the minimum wage, the lower is the quantity of unskilled workers that firms can profitably employ), Reich asserts that a higher minimum wage enables workers to spend more money on consumer goods which, in turn, prompts employers to hire more workers.  Reich apparently believes that his ability to describe and draw such a “virtuous circle” of increased spending and hiring is reason enough to dismiss the concerns of “scare-mongers” (his term) who worry that raising the price of unskilled labor makes such labor less attractive to employers.

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Blog author: jsunde
Wednesday, May 6, 2015
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00979473.JPGI recently gave a hearty cheer for bringing back childhood chores, which are shockingly absent in a majority of today’s homes. The same appears to be the case with summer work for teenagers, which is increasingly avoided due to sports activities, cushy internships, video games, clubs and camps, and, in many cases, a lack of employment prospects altogether.

In an article for the Wall Street Journal, Dave Shiflett explores the implications of this development, recalling the “grit and glory of traditional summer work, which taught generations of teenagers important lessons about life, labor and even their place in the universe.”

Whether it was newspaper delivery, construction, factory work, fast food, or manual labor on the farm or the railroad, such jobs have introduced countless kids to responsibility, creativity, and service, helping connect the dots between God-given gifts and the broader social order. (more…)

factory-workers1When faced with work that feels more like drudgery and toil than collaborative creative service, we are often encouraged to inject our situation with meaning, rather than recognize the inherent value and purpose in the work itself.

In Economic Shalom, Acton’s Reformed primer on faith, work, and economics, John Bolt reminds us that, when enduring through these seasons, we mustn’t get too concerned about temporal circumstances or humanistic notions of meaning and destiny. “As we contemplate our calling, we will not simply consider the current job market,” he writes, “but ask ourselves first-order questions about who we are, why we are here, how God has gifted us, and how we can best serve his purposes.”

This involves reexamining what our work actually is and who it ultimately serves. But it also involves fully understanding God’s design for humanity in the broader created order. As we harness the gifts and resources that God has given us, it is crucial that we understand the source and aims of our toil, and the obligation and responsibility that comes with our authority. (more…)

debt-collection-final-noticeFor decades The Episcopal Church (ECUSA) has faced declining membership (in 1966, the ECUSA had 3,647,297 members; by 2013, the membership was 1,866,758, a decline of 49 percent.) But even when people are leaving the pews someone still has to pay for those pews, as well as the other overhead costs that come with running a large organization. Not surprising, the denomination has sought ways to bring in additional revenue.

Currently, the ECUSA has two primary sources of income. According to its latest audited financial statements for the calendar year 2013, it received a little over $27 million from its member dioceses, and it received half as much again, or $13.8 million, from the federal government.

As A.S. Haley notes, the money ECUSA received from the federal government was in connection with the services provided by Episcopal Migration Ministries, which assists the State Department in relocating refugees throughout the United States. That is certainly noble and necessary work, and the denomination should be commended for providing a valuable service to a vulnerable community.

But as Haley points out, the records show the ECUSA also makes a lot of money as a debt collector:

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closedSeattle has now mandated an increase in minimum wage. The economic ramifications are being felt, especially throughout the restaurant industry.

Several Seattle restaurants have done away with tipping, but are adding a mandatory service charge on a customer’s bill.

Restaurants often operate on thin margins, so higher wages quickly impact profitability. As opposed to tips, a service charge becomes part of the restaurant’s overall revenue. The restaurateurs say the service charge component will be used exclusively for employee wages, benefits and payroll expenses.

While this may solve the economic issue for some restaurants, the mandatory minimum wage increase is causing others to simply close their doors. (more…)

Rescuers pulling smuggling victims from the Mediterranean Sea

Rescuers pulling smuggling victims from the Mediterranean Sea

It’s not easy to make a living in Libya, one of the world’s poorest nations. However, Libya has one thing going for it: its proximity to Europe. This is making smugglers rich.

Quentin Sommerville of the BBC reports his interaction with one of the smugglers.

People smugglers don’t take too kindly to enquiries about their business but, after weeks of searching, one agreed to speak to me if he could remain anonymous.

He’s grown rich out of the trade.

“The amount of money is phenomenal,” he said. (more…)