Posts tagged with: economics

pope with peterPope Francis has released his first apostolic exhortation, Evangelii Gaudium (The Joy of the Gospel). An apostolic exhortation

…is published to encourage the faithful to live in a particular manner or to do something, e.g., post synodal documents offered to the church in summary of a previous synod and hoping the faithful will do something helpful for the life of the church…

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The educational cronyism of textbook publisher cartels is coming to an end as digital alternatives are on the rise, or so says AEI’s Mark Perry in a recent article. “Hear that hissing sound?” he writes, “It’s the sound of the college textbook bubble starting to deflate. . . . The era of the college textbook cartel and $300 college textbooks is ending.”

I have written on this subject in the past for the PowerBlog (here and here), mentioning Perry’s coverage of the subject at that time, among others.

In particular, I would maintain my position today that if more affordable, quality alternatives exist, educators ought to take the time to research them and find ones that fit their curricula if they can. Students are already overburdened by student loan debt in order to get degrees of decreasing quality and utility. If a professor can do a little to lessen the financial burden of higher education, it is one small victory for the common good. And Christian educators ought to lead the way.

Perry summarizes the problem as follows:

Between January 1998 and September 2013, the CPI for college textbooks has increased by more than 144%, compared to an increase of only 44.4% for the CPI for all items, and an increase of only 0.6% for the CPI for recreational books. In real terms, the cost of college textbooks has increased by more than 69% over the last 15 years, while at the same time the real cost of recreational books has fallen by more than 30%.

The reason that the college textbook bubble is on an unsustainable price trajectory and is already starting to show some initial signs of deflating is because of the increasing amount of competition for the college textbook market.

Read more . . . .

lightbulbIn today’s Wired, Microsoft founder Bill Gates shares his thought on how busines, government and philanthropy can make positive changes in the world. Gates makes it clear that he is pro-capitalism:

I am a devout fan of capitalism. It is the best system ever devised for making self-interest serve the wider interest. This system is responsible for many of the great advances that have improved the lives of billions—from airplanes to air-conditioning to computers.

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If you’ve raised multiple children, you’ve dealt with sibling bickering, particularly if said children are close in age. With a three-year-old boy and a two-year-old girl, both just 13 months apart, our family has suddenly reached a stage where sibling play can be either wholly endearing or down-right frightening. Alas, just as quickly as human love learns to bubble up and reach out, human sin seeks to stifle and disrupt it. If that’s too heavy for you, “kids will be kids.”

twotoddlersfightingThe areas of contention vary, but most of it comes down to that age-old challenge of sharing, or, as others might frame it, the classic economic problem of scarcity. There is only one fire truck, one soccer ball, and one Buzz Lightyear, even when, in reality, there may be two or three or four. If Toddler X wants to play with Toy Z, no matter how many alluring gizmos and gadgets sit idly by, Toddler Y will all of a sudden long for Toy Z as well. Did I mention the Fall of Man?

My wife and I have done our best to teach proper behavior, maintain order, wield discipline accordingly, and love and hug and encourage along the way. When it comes to sharing, it’s no different. We promote generosity, emphasize patience, teach to inquire politely about the prospects of “collaborative consumption,” seize items when peace is rendered impossible, enforce property rights and ownership where fair and applicable, and so on.

Yet, as any parent knows, toddlerhood is characteristically suited to making a mockery of one’s parenting philosophy, whatever it may be. Just when you think you’ve trained your child to sit quietly when silence is appropriate — teaching manners, establishing authority, setting boundaries, padding the circumstances with (sugary) incentives, etc. — junior will kindly decide that he’d rather forget about all that and shout something about lavatories or Dad’s big bald head. (more…)

noun_project_19538As the US federal government sidled up to the debt ceiling earlier this week without quite running into it, one of the key arguments in favor of raising the debt ceiling was that it is immoral to breach a contract. The federal government has creditors, both from whom it has borrowed money and to whom it has promised transfer payments, and it has an obligation to fulfill those promises.

As Joe Carter argued here, “Member of Congress who are refusing to raise the debt ceiling (or raise taxes) until their ancillary demands are met are acting immorally, since they are refusing to pay the debts they themselves authorized.”

But as Connie Cass writes, the idea that the United States has never defaulted isn’t quite true. As she writes,

America has briefly stiffed some of its creditors on at least two occasions.

Once, the young nation had a dramatic excuse: The Treasury was empty, the White House and Capitol were charred ruins, even the troops fighting the War of 1812 weren’t getting paid.

A second time, in 1979, was a back-office glitch that ended up costing taxpayers billions of dollars. The Treasury Department blamed the mishap on a crush of paperwork partly caused by lawmakers who — this will sound familiar — bickered too long before raising the nation’s debt limit.

So if it is immoral to default, then America has done so at least twice.
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Blog author: dpahman
posted by on Monday, October 14, 2013

Among many other bizarre claims in his most recent article at The American Conservative, Patrick Deneen writes,

Today’s conservatives are liberals — they favor an economy that wreaks “creative destruction,” especially on the mass of “non-winners,” increasingly controlled by a few powerful actors who secure special benefits for themselves and their heirs….

Pace Inigo Montoya, I actually have no idea what Deneen thinks creative destruction means in this context.

Setting aside the question of whether or not it is a bad thing (or accurate, for that matter) to say that “[t]oday’s conservatives are liberals,” I am far more concerned with how Deneen thinks creative destruction is “wreaked” upon “non-winners.” This is further complicated by his implication that creative destruction supports, rather than threatens, “a few powerful actors.” (more…)

Defending the Free Market: The Moral Case for a Free Economy

Defending the Free Market: The Moral Case for a Free Economy

Father Sirico argues that a free economy actually promotes charity, selflessness, and kindness, and why free-market capitalism is not only the best way to ensure individual success and national prosperity but is also the surest route to a moral and socially-just society.

Visit the official website at www.defendingthefreemarket.com

$25.00

This short, satirical video sums up our mess.

Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future

Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future

In Becoming Europe, Samuel Gregg examines economic culture - the values and institutions that inform our economic priorities - to explain how European economic life has drifted in the direction of what Alexis de Tocqueville called "soft despotism", and the ways in which similar trends are manifesting themselves in the United States.

Visit the official website at www.becomingeurope.com

$25.00

Blog author: johnteevan
posted by on Monday, October 7, 2013
Photo Credit: Alan Cleaver via Compfight cc

Photo Credit: Alan Cleaver via Compfight cc

This first appeared in my newsletter, Economic Prospect, in late 2008. Looking back after five years I still like it.

The American failure to save is matched by our insistence on spending to have it all. One part of the problem is the consumer’s love of debt. The other part is the government’s love of debt. Both love debt to enjoy things now and to put off the day of reckoning. How did we get so far from the idea of being content with having enough food, clothing, and shelter?

  1. This is a complex issue based at first in ‘scarcity’ which leads people to create products to fill real needs. When these products are produced people have jobs and can afford more products. Say’s Law says that production creates its own demand.
  2. There comes a point where we move beyond some invisible line and marketing takes over to create imagined needs in people. These needs are filled by more products creating more jobs. This happened after WW2 and made us very prosperous.
  3. Then there is a third stage when the credit industry takes over and tries to convince people to borrow not just for houses or cars (durables) but for anything to enhance their way of life. This started in the 1970s. Consumer debt is $2 trillion but this kind of borrowing creates still more jobs at least for as long as the party lasts.

But the day of reckoning has arrived. Will we get the point and change our behavior? Apparently not. First, the government sold bonds, then raided the trust funds (Social Security), then we borrow to stimulate the economy…then we just borrow without limit.

If Americans are not saving, who will loan us all this money? The answer is the Chinese and Asians who are amazing savers. They will loan us the money. China already owns nearly $2 trillion in U.S. government bonds. This is not a small issue.

Economics in One Lesson : The Shortest and Surest Way to Understand Basic Economics

Economics in One Lesson : The Shortest and Surest Way to Understand Basic Economics

This classic work provides the layman with a clear understanding of the economic way of thinking. A must-read for the beginner!
$14.00

Wilkins Micawber from David Copperfield art by Frank Reynolds (2)

Wilkins Micawber, the namesake for the Micawber Principle.

Joe Carter points to a Lifehacker article that sums up two basic equations that lead to the creation of wealth (with what I consider to be a clarifying correction applied in the first formula):

Income > spending = surplus

Surplus x time = wealth

Likewise, Wilhelm Röpke, in his A Humane Economy, points to two equations arising from classical literature that connect surplus with happiness and deficit to misery (the Micawber Principle).

According to Mr. Micawber from Dickens’ David Copperfield:

Annual income £20, annual expenditure £19.975 = happiness

Annual income £20, annual expenditure £20.025 = misery
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