Posts tagged with: economy

Blog author: KHanby
Wednesday, November 30, 2016
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“An underlying theme in basic economics says, ‘offering a product for free can destroy the local economy’” writes Luis Miranda.  Miranda recently watched Poverty, Inc and since seeing the award winning Acton Institute documentary he has shared some of its lessons in an article at The Indian Economist.  He begins by explaining how often times aid can harm its recipient more than help them.

A farmer in Rwanda goes out of business because he cannot compete against an American church sending free eggs to feed starving Rwandans. A rice grower in Haiti stops growing rice because he is unable to compete against very cheap rice coming from rich farmers in the US who receive huge subsidies. A local cobbler goes out of business in Africa when TOMS shoes land up in the village and are distributed for free.

In all these cases, the donors had honest intentions. The American church wanted to feed starving people in Rwanda. The US government wanted to feed the disaster-stricken Haitians. Blake Mycoskie, the founder of TOMS, genuinely wanted to help Africans who did not have proper footwear.

Miranda continues to share key takeaways from Poverty, Inc.  Next he shares how although aid can appear to be effective in the short term, it can create negative effects in the long term. (more…)

Growing up, I attended a private, Christian school until 4th grade, when my mother couldn’t afford it any more and my brothers and I switched to a blue collar, suburban public school. Academically, I experienced a clear difference. The worst contrast was in math, where I learned basically nothing for three years. The only subject that was probably better at the public school was science, but I’m not even certain about that. Class sizes were larger too.

None of this is to say that I didn’t have good teachers and experiences and learn a great many things at my public school. I did, and I’m quite thankful for it, in fact. And, of course, private schools are perfectly capable of employing bad teachers and failing to properly educate their students. But this was my experience.

So in high school, for purely anecdotal and self-interested reasons, I supported school vouchers, much to the chagrin of many of my teachers. (There was a state level proposal in the 2000 Michigan election in support of vouchers that I wore a button supporting — I wasn’t old enough to vote at the time. Incidentally, the proposal failed.) After all, I thought, I might not have become such a slacker if I had continued to be challenged in my public school like I was in my private school.

With the recent appointment of Betsy DeVos as Secretary of Education by president-elect Donald Trump, vouchers may become a national issue. She has championed the cause and supported politicians who do for years.

Able now to take a less self-interested look at the issue (or so I tell myself), I’m actually a bit confused by the politics of vouchers — why isn’t there more skepticism on the right and support on the left? (more…)

The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated.  The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater.  The regulation was supposed to help the little guy but as Acton Director of Research Samuel Gregg writes at The Stream, it actually hurts the little guy.

President-elect Donald Trump claims that he wants to deregulate the financial industry but in order for this to happen successfully, we need to understand the argument for why such actions would be beneficial.  Gregg says this:

Consider, for instance, the costs associated with meeting the ever-growing demands of regulatory compliance. Such costs are more easily borne by large banks than smaller-sized institutions such as community banks. The result is that excessive regulation makes it harder for smaller banks to compete. That often puts access to capital out of reach for many people.

But perhaps the most harm which excessive financial regulation inflicts upon ordinary people concerns the ways in which such regulations can — and have — contributed to financial meltdowns. Such crises are far more likely to hurt those on the lower-side of the economic scale than the already-wealthy.

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In a new article at The Stream, Acton Director of Research Samuel Gregg offers good reasons why a move toward economic nationalism is not in the best interest of America.  He starts with this:

Whatever the motivations for such policies, their costs vastly outweigh their benefits. In the first place, protectionism discourages American businesses and workers from focusing on producing those goods and services where they enjoy a comparative advantage vis-à-vis other nations. Not only does this undermine productivity, efficiency, and international competitiveness of American businesses. It also encourages American workers to enter industries that, no matter how much protection they enjoy, won’t be able to compete in the long term.

Gregg continues to give reasons against economic nationalist policies throughout his article, but one reason that seems to be quite relevant at the time is crony capitalism.  Gregg says this:

Yet another problem with economic nationalism is that it encourages a growing problem in American economic life: crony capitalism.

Giving certain American businesses subsidies or lumbering foreign products with tariffs may seem like economic questions, but in practice they are ultimately political. Such policies encourage companies prefer to seek profits by lobbying legislators and bureaucrats rather than serving customers and creating value.

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republican-powerBecause of the recent election, Republicans now control the White House, the U.S. Senate (51 percent), the House of Representatives (54 percent), 31 of the 50 state governorships (62 percent), and a record 67 of the 98 partisan state legislative chambers in the nation (68 percent).

What will they do with all that power and influence?

To predict what policies the GOP will champion over the next two to four years we can turn to the most recent party platform. Although the document is not binding on the presidential nominee or any other politicians, political scientists have found that over the past 30 years lawmakers in Congress tend to vote in line with their party’s platform: 89 percent of the time for Republicans.

Here are the agenda items that are related to issues covered by the Acton Institute. (Note: This level of government that would handle each item is not designated, so some issues may be handled at the state level and others by the U.S. Congress.)

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Blog author: jcarter
Monday, November 14, 2016
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socialism-0916“In spite of socialism’s sorry track record, millions of well-meaning people think it’s a virtual synonym for compassion,” says Lawrence Reed. “But socialists themselves are constantly retreating from their own handiwork. It’s socialism until it doesn’t work, then it was never socialism in the first place. It’s socialism until the wrong guys get in charge, then it’s everything but.”

Socialism never seems to have any theory of wealth creation, only fanciful schemes for its reallocation after somebody goes to the trouble of creating it.

Oxford Dictionaries (whose slogan is “Language Matters”) defines socialism as “a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”

What is meant by “the means of production, distribution and exchange should be owned or regulated by the community as a whole”? If you own a convenience store, are you supposed to put to some public vote the decisions about what to stock the shelves with or whom to hire for the night shift?

Read more . . .

As, no doubt, many readers are getting flooded on social media with think pieces and hot takes (not to mention apocalyptic worry or celebration), the point of this post is simply to look at what the data seems to indicate about those who voted for President-elect Donald Trump and his opponent, Sec. Hillary Clinton. I’ll add a few thoughts at the end, but I am mostly just fascinated with the result, which shows more diverse support for each candidate than I had expect. However, I am also, like many, disappointed at the passions, particularly anger, that motivated some voters and which will remain with us, no matter what our party preferences, if we do not make a point to address them.

That said, there is a temptation, especially as of late, to paint supporters of either candidate with broad brushes (often unfavorably but sometimes overly flattering too). Neither serves the virtues of wisdom, prudence, or love, which ought to be at the forefront of any Christian social engagement. So, with the encouragement of those virtues as my goal, lets look at that some of the most interesting demographic groups this year.

I’ll be using New York Times exit polling data throughout. You can view it all and compare with past elections here. (more…)