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: Read more on New York Times and Flat-Earth Economics: Does Government Create Jobs?…

Hurricanes almost always leave two things in their aftermath: broken windows and articles advocating the broken window fallacy.

As economist Don Boudreaux wrote earlier today, “Americans will soon be flooded by commentary that assures us that the silver lining around the destruction caused by hurricane Sandy is a stronger economy. Such nonsense always follows natural disasters.” The only detail Boudreaux gets wrong is that such nonsense has preceded the actual disaster. The Atlantic, wanting to get a jump on being wrong, published an article today at noon arguing that Hurricane Sandy will “stimulate the economy” in two ways:

First, the threat of a dangerous event pulls economic activity forward. Families stock up on extra food and supplies to prepare for a disaster. Second, and much more significantly, the aftermath of storms requires “replacement costs” that raise economic activity by forcing business and government to rebuild after a destructive event.

Frederic Bastiat provided the ultimate rebuttal to this spurious thinking 162 years ago in his essay ‘That Which is Seen, and That Which is Not Seen.’ So why do we people make the same claim that destruction is economically beneficial? Could it be that people are simply unaware of Bastiat’s “parable of the broken window”?

Back in August economist Bryan Caplan asked why the one group that should be familiar with Bastiat’s essay—economists—don’t universally love it:
Read more on Hurricanes Lead to Broken Windows—And Broken Window Fallacies…

Bono, lead singer of U2 and co-founder of charity-group ONE, recently offered some positive words about the role of markets in reducing global poverty and spurring economic development (HT):

The Irish singer and co-founder of ONE, a campaigning group that fights poverty and disease in Africa, said it had been “a humbling thing for me” to realize the importance of capitalism and entrepreneurialism in philanthropy, particularly as someone who “got into this as a righteous anger activist with all the cliches.”

“Job creators and innovators are just the key, and aid is just a bridge,” he told an audience of 200 leading technology entrepreneurs and investors at the F.ounders tech conference in Dublin. “We see it as startup money, investment in new countries. A humbling thing was to learn the role of commerce.”

The remarks have led to relative hype in “pro-market” circles, but I’d remind folks that these are brief statements made to a small group of innovators and entrepreneurs. ONE has plenty of wrinkles in its past, and Bono’s primary legacy in this arena consists of promoting the types of ineffective, top-down social engineering that groups like PovertyCure seek to expose. When Bono continues to claim that foreign aid, as he understands it, is still a “bridge”—even if just a bridge—it’s reasonable to assume that his orientation toward “bridge-building” has been left largely unchanged by his newfound appreciation for markets.

But although I’m not overly confident that Bono’s sudden self-awareness is enough to radically shift his aid efforts away from fostering dependency, this small admission helps illuminate one of our key obstacles to doing good in the world: overzealousness paired with overconfidence.
Read more on Bono, Babel, and the Myth of Economist as Savior…

In March 2009 the deputy chief of Italy’s Civil Protection Department and six scientists who were members of a scientific advisory body to the Department held a meeting and then a press conference, during which they downplayed the possibility of an earthquake. Six days later an earthquake of magnitude 6.3 killed 308 people in L’Aquila, a city central Italy. Yesterday, the seven men were convicted of manslaughter and sentenced to six years in prison for failing to give adequate warning to the residents about the deadly disaster.

The news reports imply that the scientists were sentenced because of their failure to predict the earthquake. But Roger Pielke, Jr., a professor of environmental studies at the University of Colorado, says “one interpretation of the Major Risks Committee’s statements is that they were not specifically about earthquakes at all, but instead were about which individuals the public should view as legitimate and authoritative and which they should not.”

Whether it was because of their predictions or because of the authority with which they made their claims, the scientists were sent to prison for making an erroneous prediction about how nature would act. Such a judicial ruling would strike most of us Americans as absurd. We’d rightly assume that it might provide scientists with an incentive to not make any predictions at all. As Thomas H. Jordan, a professor at the University of Southern California, says, “I’m afraid it’s going to teach scientists to keep their mouths shut.”
Read more on The Low Cost of Being Wrong…

Thanks to Fr. John A. Peck at the Preacher’s Institute for sharing this article with the PowerBlog.

On Consecrating the Entire Economic Order

By Fr. Patrick Henry Reardon

St. Luke’s account of Zacchaeus in the sycamore tree (19:1-10) is a story rich in spiritual reflection; preachers and Bible-readers, coming from a variety of backgrounds, have explored the narrative unto great profit for the education of the soul.

A certain liturgical use of the text is particularly instructive; namely, the story of Zacchaeus has long been read in the dedicatory service of a new church building. This liturgical custom—warranted by Jesus’ assertion,

Today, I must stay at your house

indicates a symbolism: The home of Zacchaeus represents the consecrated places where Christians gather to meet, worship, and commune with Jesus.

Harvesting apples for Calvados in France

There is an irony here: Even as we insist that Jesus preached the Gospel to the poor, he sometimes did so in the homes of wealthy. The reason was very simple: the wealthy had larger homes; a greater number of people could actually assemble there. (Some folks, doubtless, will be offended by this consideration, but let me mention that the first complaint on the point was made at the time-Luke 19:7).

This consideration of wealth is pertinent to the custom of reading the story of Zacchaeus when a church building is consecrated. It is a tacit admission that the construction of a church building absolutely requires a significant accumulation of wealth. Read more on On Consecrating the Entire Economic Order…

On National Review Online, Acton Research Director Samuel Gregg offers an analysis of last night’s debate between President Barack Obama and Gov. Mitt Romney. Gregg begins with the assertion by Melinda Henneberger of the Washington Post that the candidates are ignoring poor and working-class Americans. Gregg responds:

Read more on Samuel Gregg: Who’s Really Forgotten the Poor…

I think somebody needs to admit that the level of pandering to women in this election is over the top. Whether it is Ann Romney awkwardly yelling, “I love you women” at the Republican National Convention, or the ridiculous “War on Women” meme from the left. The examples are just too many to cite and evaluate for one post. So much of it is focus driven and poll tested and here with us to stay, but the issue still needs to be addressed.

Read more on The Presidential Debate and Pandering to Women…

This morning at Ethika Politika, I argue that “acting primarily for the sake of national interest in international affairs runs contrary to a nation’s highest ideals.” In particular, I draw on the thought of Vladimir Solovyov, who argued that, morally speaking, national interest alone cannot be the supreme standard of international action since the highest aspirations of each nation (e.g. “Life, Liberty and the pursuit of Happiness”) are claimed to be universal goods. I would here like to explore his critique with reference to the subject of international trade. Read more on Are Protectionism and Patriotism Incompatible Principles?…

Don’t miss out on your chance to apply for a scholarship for the spring 2013 semester!

If you or someone you know would like to be considered for a Calihan Academic Fellowship, the deadline to submit application materials is Monday, October 15. Eligible candidates include graduate students or seminarians pursuing fields such as theology, philosophy, economics, or related themes promoted by the Acton Institute. Visit the Calihan Academic Fellowship page on Acton’s website for more detailed information on eligibility and the application process. Contact Michelle at mhornak@acton.org with any scholarship-related questions.

Read more on Monday: Calihan Scholarship Deadline…

Call for Papers: “Economics, Christianity & The Crisis: Towards a New Architectonic Critique”

The 2008 credit crisis is not only a crisis in economics, but also a crisis in the basic concepts and assumptions that underlie our thinking about economics, economics as a science. Critical analyses are called for of both economic practices and economic theory. New concepts and paradigms are needed. The first Kuyper Seminar Amsterdam aims at exploring what resources the Christian tradition has to offer for developing a sustainable and just economy of the future.

Read more on ResearchLinks – 10.05.12…