The Heritage Foundation recently interviewed Michigan businessman and entrepreneur Dick DeVos, a former candidate for governor, about how Michigan was able to pass their Right-to-Work law and what lessons conservatives can take away from the victory as they make the case for freedom.
Author of “Becoming Europe” and Acton’s Director or Research, Samuel Gregg, will be at The Heritage Foundation on Thursday, February 7 to speak on “Economic Decline, Culture, and How America Can Avoid a European Future.” The event can be attended in person or viewed online. Visit the Heritage events page for more details.
Read an excerpt of “Becoming Europe” and purchase the book here.
There are more people living in the city of Los Angeles than live in New Zealand. Yet the small country in Oceania beats out the the U.S. in several key areas, such as on the production of movies about hobbits, ratio of sheep to humans (9 to 1), and . . . economic freedom.
And the Kiwis aren’t the only ones. Australia, Canada, Switzerland, and six other countries have more freedom to control their own labor and property than we do. According to the Index of Economic Freedom, an annual report released by The Wall Street Journal and The Heritage Foundation, the United States has continued it’s half-decade of decline:
Registering a loss of economic freedom for the fifth consecutive year, the U.S. has recorded its lowest Index score since 2000. Dynamic entrepreneurial growth is stifled by ever-more-bloated government and a trend toward cronyism that erodes the rule of law. More than three years after the end of recession in June 2009, the U.S. continues to suffer from policy choices that have led to the slowest recovery in 70 years. Businesses remain in a holding pattern, and unemployment is close to 8 percent. Prospects for greater fiscal freedom are uncertain due to the scheduled expiration of previous cuts in income and payroll taxes and the imposition of new taxes associated with the 2010 health care law.
Restoring the U.S. to a place among the world’s “free” economies will require significant policy reforms, particularly in reducing the size of government, overhauling the tax system, transforming costly entitlement programs, and streamlining regulations.
Still, there are 134 countries that are even less free. So while we’re not free as folks in Denmark or Chile, we’re not as bad off as Cubans or North Koreans either. I guess that’s something to be thankful for.
On The Foundry, Sarah Torre writes about the many faith based challenges that remain to the Obamacare law. There are many organizations that are religious in nature, but are not themselves churches. To comply with the new health laws, they will be compelled to provide conscience violating services. Towards the end of the post, Torres quotes the president of Geneva College, Dr. Ken Smith:
The issue that we have with the entire law is that the Obama Administration has tried to define religion as being that which what churches do. We believe that religion takes us into the marketplace. There is both an internal community of faith responsibility of religion, but there is also an external service to community. That is religion.
A lot has been written about how this issue will impact hospitals. Donald P. Condit noted in an Acton Commentary piece that one in six patients in the United States will receive care in a Catholic Hospital. Yet, the Obama administration’s threat to religious liberty is not limited to just the case of religious groups directly providing services. The HHS mandates (more from Acton here) threaten the conscience of all people engaged in business. And if the threat extends to health care, where will it end?
As pointed out in The Foundry, religion takes us into the marketplace. Christianity is a motivating force for people throughout the market. Yet, the Obama administration seems to think that our religious life should separated from our everyday life. How can we expect people to somehow check their faith at the door when they do business? Rev. Robert Sirico outlines in “The Entrepreneurial Vocation” how our faith relates to entrepreneurship. The idea that our religious life is or should be separate from our commercial life is absurd, yet this is precisely what compliance with anti-conscience provisions of the Obamacare law would force us to do. Donald P. Condit got it right: this is an unconscionable threat to conscience.
H/T to Kathryn Jean Lopez at NRO’s The Corner.
On Forbes, Doug Bandow surveys how both the religious left and religious right are using explicit faith teachings and moral arguments in the federal budget and spending battles:
Does God really insist that no program ever be eliminated and no expenditure ever be reduced if one poor person somewhere benefits? Perhaps that is the long lost 11th Commandment. Detailed in the long lost book of Hezekiah.
The budget does have moral as well as practical implications. However, as Ryan Messmore of the Heritage Foundation observed, “The budget is indeed a moral document, but it is also a morally complex document.” The fact that one is poor does not entitle one to any specific form or level of government benefits.
David Beckmann, president of Bread for the World—which actually lobbies government for more government spending rather than provides food for the world’s poor—stated that “there’s a lot in the Bible that says you have to help poor people.” That’s right. That “we” have to help the poor. Not that we have to force others to help.
Yet, as Mark Tooley of the Institute on Religion and Democracy noted, these groups “aren’t calling for individuals to shed their wealth for God’s Kingdom. Of course, they primarily want an all powerful state to seize and redistribute wealth according to some imagined just formula, after which the lion will lie peaceably with the lamb. It’s a utopian dream, not based on the Gospels, always monstrous when attempted, and premised more on resentment than godly generosity.”
Concern for the poor permeates Scripture, but nowhere does God set forth the means to achieve this end.
Read “God: The Shakedown Artist For The Welfare State?” on Forbes. (HT: RealClearReligion).
Also see the special Acton resource page: Principles for Budget Reform.
Protect the Poor, Not Poverty Programs
By John Couretas
One of the disturbing aspects of the liberal/progressive faith campaign known as the Circle of Protection is that its organizers have such little regard – indeed are blind to — the innate freedom of the human person.
Their campaign, which has published “A Statement on Why We Need to Protect Programs for the Poor,” equates the welfare of the “least of these” in American society to the amount of assistance they receive from the government — a bizarre view from a community that trades in spiritual verities. Circle of Protection supporters see people locked into their circumstances, stratified into masses permanently in a one-down position, thrown into a class struggle where the life saving protection of “powerful lobbies” is nowhere to be found. And while they argue that budgets are moral documents, their metrics for this fiscal morality are all in dollars and cents.
Not only does the Circle of Protection group appear to be oblivious to the power of private charity and church-based outreach to the needy, but they seem to have no hope for the poor outside of bureaucratic remedies. This is a view of the human person not as a composite of flesh and spirit, but as a case number, a statistic and a passive victim of the daily challenges and troubles that life brings.
In response to the Circle of Protection campaign, another faith group has formed with a very different outlook on the budget and debt debates that will consume the political energy of the country in the months ahead. Christians for a Sustainable Economy (CASE) argue for policies that are focused less on protecting poverty programs and more on protecting the poor (I am a supporter). In a letter to President Obama, CASE wrote:
We need to protect the poor themselves. Indeed, sometimes we need to protect them from the very programs that ostensibly serve the poor, but actually demean the poor, undermine their family structures and trap them in poverty, dependency and despair for generations. Such programs are unwise, uncompassionate, and unjust.
This is what Fr. Peter-Michael Preble was getting at when he observed that “… the present government programs do nothing but enslave the poor of this country to the programs and do nothing to break the cycle of poverty in this country.” This is not, he added, an argument to eliminate all government assistance but rather for “a safety net and not a lifestyle.”
In discussing the relative merits of the Circle of Protection and the Christians for a Sustainable Economy campaign, Michael Gerson wrote that “the Circle’s approach is more urgent.” Arguing against “disproportionate sacrifices of the most vulnerable,” he asserted that “public spending on poverty and global health programs is a sliver of discretionary spending and essentially irrelevant to America’s long-term debt.”
It’s a big and growing “sliver.” According to a Heritage Foundation study of welfare spending, of the 70-odd means-tested programs run by the federal government, “almost all of them have received generous increases in their funding since President Obama took office.” The president’s 2011 budget will increase spending on welfare programs by 42 percent over President Bush’s last year in office. Analyst Katherine Bradley observed that “total spending on the welfare state (including state spending) will rise to $953 billion in 2011.”
Instead of more billions for failed poverty programs, CASE argues that “all Americans – especially the poor – are best served by sustainable economic policies for a free and flourishing society. When creativity and entrepreneurship are rewarded, the yield is an increase of productivity and generosity.” Underlying this is a belief that the human person is able to freely and creatively anticipate what life may bring, rather than wait around for a caseworker or a Washington lobbyist to intervene.
That freedom explains why some people, even in difficult economic times, can move up the income scale despite assertions that they are among the “most vulnerable.” A U.S. Treasury study showed that “nearly 58 percent of the households that were in the lowest income quintile (the lowest 20 percent) in 1996 moved to a higher income quintile by 2005. Similarly, nearly 50 percent of the households in the second-lowest quintile in 1996 moved to a higher income quintile by 2005.” In an analysis of income inequality and social mobility, economist Thomas Sowell wrote that there is a confusion “between what is happening to statistical categories over time and what is happening to flesh-and-blood individuals over time, as they move from one statistical category to another.”
Income mobility is debated endlessly by economists, but it is the existential reality for countless Americans who have ever strived for something better — or suffered a setback in their hopes. Yet the one sure thing that will stifle this mobility is an economy in decline, with job creation slowed, and encumbered by ever higher federal budget deficits and debt. And that’s what we’ll get more of if the Circle of Protection’s prescriptions for a “moral budget” hold sway.
When economic systems break down, as they are now unraveling in some European welfare states, those who will be hurt first and hardest will be the poor, the working family living from paycheck to paycheck, the pensioner – those operating at the margins. If we fail to come to grips with the reality of our potentially ruinous fiscal trajectory, we will all learn, as other countries are now learning, what “truly vulnerable” means.
As citizens await state decisions on new state EPA “fracking” regulations, many are worried radical environmentalist may compromise a promising opportunity in the development of gas reserves.
Natural gas advocates say radical environmentalists have long demonized the oil industry in their fight against free enterprise. Environmental groups claim fracking techniques to extract natural gas threatens the cleanliness of ground water, but their attacks contradict EPA studies that report there are no proven cases where fracking has contaminated water.
Extreme environmental groups have teamed up with some in the media to push their anti-growth agenda. A Heritage Foundation blog reports,
Environmentalists […] have hijacked media outlets like The New York Times to run biased reports against fracking’s key contributions to America’s current and future energy supplies that would be a tremendous catalyst for the country’s economic recovery.
Though more EPA fracking studies are currently underway, environmentalist accusations contradict solid facts and studies. With almost any human activity, there will be some sort of environmental effect, but the benefits of shale drilling blows the costs out of the water. According to experts, a typical Marcellus Shale well can generate up to $4 million in economic benefits while only creating $14,000 in environmental damage.
If given the chance, the Independent Petroleum Association of America suggests the oil industry has the potential to lift our economy back on its feet again:
Petroleum powers the economy of this nation overall, evidenced by [a] strong correlation between states that have high petroleum use and high output. Petroleum is integral in our daily lives, not just as a fuel, but because it is present in common objects that are crucial to living a high-quality life.
But radical environmental groups often stand in the way. Some of these groups insist on “biological egalitarianism” in which all life forms are considered equal. An Acton publication titled A Biblical Perspective on Environmental Stewardship explains the dangerous connotation of this faulty environmental philosophy:
Instead, this philosophy negates the biblical affirmation of the human person’s unique role as steward and eliminates the very rationale for human care for creation. The quest for the humane treatment of beasts by lowering people to the level of animals leads only to the beastly treatment of humans.
Extreme environmental groups should remember the oil industry is not evil. They fail to see that their radical ideology is hurting the nation’s poor. Increasing oil production can fuel economic growth and provide jobs for the unemployed. To attack the oil industry in such a way is indirectly attacking human development. Cited in Ray Nothstine’s commentary on high gas prices and its impact on the poor are these words from John Paul II,
Besides the earth, man’s principle resource is man himself. His intelligence enables him to discover the earth’s productive potential and the many different ways in which human needs can be satisfied.
Of course, any human action has some effect on the environment; and so we have the responsibility to exercise environmental stewardship rather than prioritizing the fish in the Chesapeake Bay over the welfare of the human person.
The recent budget battle may have sparked new questions for Americans to answer, such as what is poverty and who falls under such a classification? Furthermore, due to its massive debt, government may need a limited role in helping the poor. While Christians who stood behind the Circle of Protection advocated for the protection of programs they claim that benefit the poor, other Christians looked at the debate differently arguing for another way to help the poor. However, despite how we decide to help the poor, is our understanding of what it means to be poor misleading?
In the Washington Examiner, Thomas Sowell answers this question with a resounding yes as he explains how the definition of poverty has been politicized and changed:
Each of us may have his own idea of what poverty means, especially those of us who grew up in poverty. But what poverty means politically and in the media is whatever the people who collect statistics choose to define as poverty.
This is not just a question of semantics. The whole future of the welfare state depends on how poverty is defined. “The poor” are the human shields behind whom advocates of ever-bigger spending for ever-bigger government advance toward their goal.
If poverty meant what most people think of as poverty — people who are “ill-clad, ill-housed, and ill-nourished,” in FDR’s phrase — there would not be nearly enough people in poverty today to justify the vastly expanded powers and runaway spending of the federal government.
Sowell goes further in-depth in his column supporting his arguments with a study from the Heritage Foundation which shows what it means to be “poor” in America.
Using the same study from the Heritage Foundation, Anthony Bradley argues in World Magazine that we need wealth creation to help the poor. Bradley explains how being poor in a wealthy nation is drastically different from being poor in a developing one:
“As the rich get richer, the poor get richer”
That may sound like a ridiculous overstatement but it’s true in the sense that nations that create wealth redefine what it means to be poor. Being poor in a wealthy nation is radically different than being poor in a developing one. The above statement also challenges the zero-sum myth: “As the rich get richer, the poor get poorer,” which has so tainted the understanding of economic imaginations of those in the West.
In fact, to be more specific, 99.6 percent of individuals the federal government defines as “poor” have refrigerators, 97.7 percent have televisions, 78.3 percent live in homes with air-conditioning, and 62 percent live in homes with washing machines. These percentages are only possible in a nation as wealthy as the United States; it certainly is not the case in Sudan.
Political liberals and progressive Christians are vulnerable to accepting zero-sum ideology without taking the time to test those theories against real data and facts. The argument here is not that American poverty is “OK”; the point is to highlight the fact that making public policy decisions about “helping the poor” and “ending poverty” in America needs to take into account how “the poor” actually live in reality. Otherwise we will continue to miss the mark and not help the truly disadvantaged. Our public policy needs to be directed toward people who are truly suffering and stuck in cycles of poverty so that we create the conditions that allow for the possibility of sustainable economic mobility.
Bradley raises a valid point, and based on what it means to be “poor” in America is there an injustice and disservice being committed to the poor in developing countries?
Both authors demonstrate the battle is over how we definite what it means to be poor. Unfortunately though, we are now faced with asking ourselves how politics have affected our definition of poverty, and, with the politicization of poverty, have we forgotten what it really means to be disadvantaged? In terms of what poverty means, the questions we face are not easy to answer, they’ll need a prudential approach rooted in Christian values.
Here’s the piece I contributed to today’s Acton News & Commentary:
Fertile Ground for Farm Subsidy Cuts
By Elise Amyx
With debt and budget negotiations in gridlock, and a growing consensus that federal spending at current levels is unsustainable, political support for farm subsidies is waning fast. What’s more, high crop prices and clear injustices are building bipartisan support for significantly cutting agricultural subsidies in the 2012 Farm Bill.
The New Deal introduced an enormous number of agriculture subsidy programs paved with good intentions to help struggling farmers, create a stable food market and alleviate poverty. While many other industries have been deregulated since the Depression-era reforms, agricultural subsidies have grown. Now considered by some to be America’s largest corporate welfare program, it is obvious that the government has failed to meet its original goals.
The glaring injustices built into farm subsidy policies explain why so many on both the political right and left routinely describe them as immoral. Subsidies reward large commercial enterprises — in good times and bad — and shut out small farmers. Developing countries that desperately need to boost agricultural exports cannot compete with subsidized, over-produced crops from wealthy nations. Subsidies also drive up the cost of food for the poor and working families.
Iowa farmer Mark W. Leonard, in a 2006 Wall Street Journal interview, described how he brought a farmer from Mali to talk to local church gatherings about the adverse effects of subsidies. “From a Christian standpoint, what it is doing to Africa tugs at your heartstrings,” he said. The bottom line is that the large, commercial farmers win and everyone else loses.
Rural communities dependent on farming seem to have the long end of the stick, but this isn’t true. According to an Iowa State University study, the most highly subsidized areas in the United States are seeing little to no economic growth. In counties where farm payments are the biggest share of income, job creation is very weak. This can possibly be attributed to highly subsidized agribusiness buy outs of family farms. It is ironic that farm payments are intended to foster growth but instead they appear to be linked with subpar economic performance.
Though meant to support the incomes of farmers and promote rural economic growth, subsidies are making rich farmers richer. Subsidies don’t usually end up where they are most needed because the top 10 percent of recipients receives 74 percent of the payments. Instead of helping those most in need, farm payments are just another failed government welfare program.
Agricultural subsidy programs are funded by taxpayers’ dollars and end up raising the cost of food for the domestic consumer. In other words, we are paying for subsidies twice over. Even though price supports are intended to stabilize food production and thus prevent wild price swings, a Heritage Foundation research report found that consumers actually end up spending more on food in the long run when all price distorting effects are considered. Commodity subsidies encourage overproduction and lower prices, but the Conservation Reserve Program encourages underproduction and raises prices. Tariffs raise the price of imported food. For example, the sugar program operates as a cartel by controlling prices and limiting imports, which significantly raises the cost of sugar.
It is poor budgetary stewardship on the government’s behalf to fund a program with taxpayer dollars that makes food more expensive for consumers. According to the Heritage Foundation, the Organisation for Economic Co-operation and Development estimates the average household spent “$216 in annual taxes in addition to $104 in higher food prices.”
Subsidy payments are commodity specific, so unless you’re growing corn, wheat, soybeans, or another subsidized crop, you’re on your own. Jack Thurston, co-founder of FarmSubsidy.org told Time Business, “The bigger you are, the more subsidies you get. It is the reverse of what you think a subsidy is.”
Because farm payments often encourage overproduction and consolidation of agribusinesses, the price of land is inflated, which makes it very difficult for would-be farmers to enter the market. Rather than giving them a fair opportunity, subsidies undermine the entrepreneurial spirit of young domestic farmers.
Commodity price supports, export subsidies and tariffs drive commodity prices below the world price, which makes it difficult for foreign countries to compete. Surpluses of overproduced U.S. crops are dumped on the international market at prices well below the cost of production, creating even more price volatility. Many poor nations have few other options outside of subsistence farming. Subsidies keep poor nations poor and dependent on developed countries.
There is no doubt that farming is a difficult, volatile business filled with risk and uncertainty — and so are many other successful industries that do not receive any government hand outs. Farmers receiving payments should be careful not to view the government as a savior, who will reduce risk, create certainty and save the day if something bad happens. This is a dangerously dependent position to be in, and it is morally problematic when it comes at the expense of everyone else.
A farmer from Mississippi by the name of Lanier, in a recent call in to NPR, said he doesn’t need the government to help him run his business: “I’m not going to be very popular with this comment, but my family has farmed [6,000] to 8,000 acres every year. We own about five of that and lease the rest depending on what we think the market conditions will be. But, quite frankly, we don’t need these subsidies … we being the larger farmers; we’re getting paid seven digits to not farm areas of our farm. That’s ludicrous. […] We cry, hey, it’s a risk. But tell me what business there is out there that doesn’t have a risk.”
Agricultural subsidies make little economic sense and they display many of the problems that characterize other large welfare programs: injustice, dependency and a slew of unintended consequences.
But, good news might be just around the corner. Recent reports suggest agricultural subsidies will see drastic cuts in the upcoming farm bill due to high commodity prices and the budget crisis. Americans should be cautiously optimistic that America’s largest corporate welfare program will take a big hit in 2012.