Posts tagged with: economics

Blog author: kjayabalan
Wednesday, April 2, 2014
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Although religion and politics are not supposed to be discussed in polite company, they are nearly impossible to ignore. We try to do so in order to avoid heated, never-ending arguments, preferring to “agree to disagree” on the most contentious ones. It’s a mark of Lockean tolerance, but there are only so many conversations one can have about the weather and the latest hit movie before more interesting and more important subjects break through our attempts to suppress them.

This is evident even when there’s nothing contentious involved in a religious-political meeting. A case in point: U.S. President Barack Obama met Pope Francis for the first time on March 27 at the Vatican, a meeting that would be noteworthy in and of itself because of the offices involved. Yet secular and religious, conservative and liberal commentators immediately began telling us what to watch for well ahead of their meeting, as if there was something significant at stake – which there wasn’t. Obama supporters said the president and the pope are soul mates when it comes to poverty and inequality, while his detractors couldn’t wait to hear about Francis reminding Obama about the U.S. Catholic bishops’ unanimous opposition to the mandated coverage of contraception and abortifacents in Obama’s health care plan. The debate over who said what to whom in their 50-minute conversation continued when the Vatican press office and Obama himself presented different versions of its contents. (more…)

Blog author: jcarter
Wednesday, April 2, 2014
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money-and-justice-scales“If a society regards governmental manipulation of money as the antidote to economic challenges,” writes Acton research director Samuel Gregg at Public Discourse, “a type of poison will work its way through the body politic, undermining justice and the common good.”

Money: it’s on everyone’s mind sometimes. In recent years, however, many have suggested there are some fundamental problems with the way money presently functions in our economies.

No one is seriously denying money’s unique ability to serve simultaneously as a medium of exchange, a measure and store of value, and a means of calculation. Yet deep reservations about the current workings of the world’s monetary systems, both foreign and domestic, have been expressed by people ranging from Senator Rand Paul (who is fiercely critical of the Federal Reserve), to Pope Francis (who has denounced what he calls “the cult of money”) and France’s François Hollande (who once described “big finance” as his “greatest adversary”).

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Acton Institute President Rev. Robert A. Sirico joins host Dennis Miller on The Dennis Miller Show to discuss President Obama’s recent visit in Rome with Pope Francis, and the differences between the current president’s relationship with the Roman Pontiff and that of Reagan and Pope John Paul II. They also discuss the PovertyCure initiative, after which Dennis declares “Bobby Sirico” to be a “good cat,” which is high praise indeed coming from the former host of SNL’s Weekend Update. The audio is available via the player below.

bitcoin“For federal tax purposes, virtual currency is treated as property.”

With those ten words, the IRS has made it more difficult — if not impossible — for bitcoin and other virtual currencies from gaining widespread, mainstream acceptance as a currency for commercial transactions. Because they are now treated as property, virtual currencies are considered, like stocks, bonds, and other investment property, as capital assets and will be subject to capital gains tax.

But why does this hinder bitcoins use a currency? The answer is fungibility: Bitcoins are no longer completely fungible.
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Many who reject capitalism in favor of some “third way” do so because they often mistake it for government-corporate cronyism, says Jonathan Witt in this week’s Acton Commentary. But in countries that have begun extending true economic freedom to the masses, capitalist activity has already lifted hundreds of millions of people out of extreme poverty.

Happily, a new piece in The Economist magazine offers some helpful medicine for the confusion, insisting on the distinction between cronyism and capitalism while also pointing to some hopeful signs that a rising middle class around the globe is gaining the clout to fight the power structures that still wall millions out of the wealth creation game. My reservation about the article is that it misreads America’s Progressive era, and in the process, leaves cronyism’s favorite trick unexposed.

According to the piece, crony capitalism in America “reached its apogee in the late 19th century, and a long and partially successful struggle against robber barons ensued. Antitrust rules broke monopolies such as John D. Rockefeller’s Standard Oil. The flow of bribes to senators shrank.” Later, it tells readers that while developing countries are making progress against cronyism, “governments need to be more assiduous in regulating monopolies.”

The full text of his essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

dv1693021Modern rhetoric of income inequality is driven by covetous envy, says Russell Nieli. Caritas, humility, gratitude, and goodwill toward others are a healthy society’s answer to the ancient curses of envy and pride:

The problem of the chronically poor is that they are chronically poor, not that some people make a lot more money than other people and bring about “inequality.” The fact that some fail to earn enough to live at a decent level is a genuine social problem. The fact that those who are not poor are widely dispersed in terms of how much they earn is not.

Under the rhetoric of “inequality,” covetous envy—including that of the upper-middle-class for the truly affluent—has reared its ugly head. Mayor de Blasio’s proposal to fund universal pre-kindergarten education by an income tax increase solely on the income of the highest income earners making more than $500,000 a year, who already pay city income taxes at the highest graduated rate, is an iconic example of this newer tendency to combine genuine anti-poverty concerns with envy-driven, soak-the-rich taxation policies. It is perhaps no accident that New York’s upper middle class (those making between $100,000 and $200,000 annually) voted for de Blasio in greater proportion than many New Yorkers in lower income brackets.

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wallet-lockWhen bank robber Willie Sutton was asked why he robbed banks, he is (mis)quoted as having said, “Because that’s where the money is.” Turns out that is also why there is more street crime in poorer neighborhoods: because that’s where the cash is. Or at least it’s where the case was.

It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods — where street offenses are concentrated — a significant source of circulating cash stemmed from public assistance or welfare payments. But starting in the 1990s that changed, as the Federal government gradually phased out paper welfare checks in favor of electronic debit cards (the Electronic Benefit Transfer [EBT] program).

A team of researchers studied the effects of this change in Missouri and found that it was directly responsible for a hefty 10 percent drop in the overall crime rate:
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Lorde LikenessAt Reason Thaddeus Russell argues that Macklemore and Lorde embody a kind of progressive cultural critique of capitalism, captured in the attack on “conspicuous consumption” made famous by Thorstein Veblen. Russell traces the “progressive lineage” of this critique: “Their songs continue a long tradition, rooted in progressivism, of protests against the pleasures of the poor.”

Having never listened to him, I have no opinion about Macklemore. Russell’s piece makes me want to take a moment to hear “Thrift Shop.” But over at Q Ideas today, I argue that in Lorde we find some cultural resources to inoculate us against the corrosive effects of envy.

The Christian tradition has long recognized that the poor can be just as materialistic and greedy as the rich. The poor just don’t usually have the same resources to bring those vices to such “conspicuous” manifestation. And it really is a stewardship problem to spend money on luxury goods when basic necessities are given short shrift.
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Amity Shlaes

Amity Shlaes – Graphic Novelized!

In November of last year, we had the privilege of welcoming bestselling author Amity Shlaes for a visit here at the Acton Building while she was in Grand Rapids to speak about Calvin Coolidge at Grand Valley State University’s Hauenstein Center for Presidential Studies. Aside from being a fine author of some very thought provoking books on history and economics, she’s a delightful lady, and it was a pleasure to have an opportunity to make her acquaintance personally. At the time, she was very excited about a project that she had been working on which was soon to be released to the public – a graphic novel adaptation of her best-selling book, The Forgotten Man. Her enthusiasm for the project was infectious, and I’ve been looking forward to its release ever since. (You can pre-order a copy of the book, which is set to be released on May 27.)

But how does one take a nearly 500 page hardcover book that revisits the economic history of the Great Depression and translate it into a visual presentation on the printed page? It wasn’t a simple process. Paul Rivoche is the artist who worked with Shlaes on the project; in this interview at Graphic Novel Reporter, he describes how the original book was reworked in order to create a compelling visual story:

The original book was nonfiction and of course not at all structured to be a graphic novel. It’s an economic history of the New Deal/Great Depression era, described from an alternative viewpoint. It has a huge cast of characters — all real people — and discusses many abstract ideas. To make it work as a graphic novel, we had to find a new structure for the same material; we couldn’t follow the exact arrangement in the print book. For example, there are many jumps in location in the real-life story we tell, and all these characters coming and going. In prose, it worked because you imagine it in your head, stitching it together, following the steady guidance of the author’s voice. In comics form, the same thing was disorienting. We learned that if the visuals change too fast, without enough explanation, the reader easily becomes confused when dealing with such complex events, all these different scenes and faces. To solve this, we decided to introduce a “framing story” using a narrator, Wendell Willkie. In telling the story, he guides us — at times directly, and in other scenes we hear his voiceover narration in captions. Also, we had to make the story as visual as possible, not all “talking heads,” which make for dull comics. Instead, we highlighted interesting locales: the Hoover Dam, the great flood of 1927, Willkie’s famous debate, and many others. In every scene we aimed to introduce as much movement, action, and characterization as possible.

The full interview has more detail on the project; After the jump, you can listen to an August 2012 Radio Free Acton interview with Amity Shlaes on her then-forthcoming biography on Calvin Coolidge.

Paul_Rivoche_The_Forgotten_Man

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Bill GatesIn a recent interview with Rolling Stone, Bill Gates — the richest man in the world — shares his thoughts on poverty and inequality:

Should the state be playing a greater role in helping people at the lowest end of the income scale? Poverty today looks very different than poverty in the past. The real thing you want to look at is consumption and use that as a metric and say, “Have you been worried about having enough to eat? Do you have enough warmth, shelter? Do you think of yourself as having a place to go?” The poor are better off than they were before, even though they’re still in the bottom group in terms of income.

The way we help the poor out today [is also a problem]. You have Section 8 housing, food stamps, fuel programs, very complex medical programs. It’s all high-overhead, capricious, not well-designed. Its ability to distinguish between somebody who has family that could take care of them versus someone who’s really out on their own is not very good, either. It’s a totally gameable system – not everybody games it, but lots of people do. Why aren’t the technocrats taking the poverty programs, looking at them as a whole, and then redesigning them? Well, they are afraid that if they do, their funding is going to be cut back, so they defend the thing that is absolutely horrific. Just look at low-cost housing and the various forms, the wait lists, things like that.

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