Posts tagged with: welfare

The Acton Commentary this week from my friend John Teevan compares church budgets to government budgets, and what “government thinking” might look like if it were reflected in charitable and ecclesiastical budgeting. He writes, “If we think the government is the best source of compassion for the needy and the engine of economic growth, then it makes sense to set taxes at high rates so the government can do all good things for the people.”

On that point, over at Evangelical Perspective Collin Brendemuehl asks some salient questions in comparing government welfare to private charity.

Is the government 50% efficient? 75% efficient? I can’t venture a guess. But apparently neither can the bureaucrats. But even so, is it a stretch to say that the government is more than likely much less efficient than these charities? Not a tough one, really. Though government has the advantage of being in tough with society on a broader scale, it is also much less capable at targeting specific needs in a short amount of time. Anyone remember how fast Feed the Children and others got into New Orleans ahead of government? They were there faster, with just as much material, and actually met needs. (They did not randomly hand out $2,000 debit cards without accounting.)

Now that’s not to say that efficiency is the only valid factor to consider when evaluating charities or government programs. But it is an important factor and has to do with meeting one’s obligations as a steward of other people’s money or property. It’s in this sense that, as Collin writes, “Government is a servant. At least it ought to be.”

On the question of giving to charities and churches, D. G. Hart has raised this question of extra-ecclesiastical giving in a couple of posts over at Old Life. My final commentary of 2010 made the point that “Christian Giving Begins with the Local Church.” But as I said in a follow-up post over at Mere Comments, I don’t think Christian giving ends there. I wonder why Hart has focused so much on The Gospel Coalition, Desiring God, and Redeemer City to City in particular. It seems his critique would apply equally as well to other organizations like the Alliance of Confessing Evangelicals and Ligonier Ministries.

Blog author: jwitt
posted by on Tuesday, November 16, 2010

There’s a story that I heard, of a miner, a family down in– it was in the Appalachia area and the church there really thought that they were doing a great deal because they would go in, they said they would pick the poorest families and they would take them Christmas gifts and turkeys and that sort of thing. So they did. They went to this family and they presented them with all the gifts and gave them to them and all the children had gifts; they had a hot meal on the table. The church was so pleased with what they had done, and then they left. And the husband just broke down and cried because he said, “You mean in this community, we are thought of as the poorest family in the community?” The shame that came with that, with the charity that had been given so lovingly out of the best of intentions, but it absolutely shamed him and it destroyed his life. I heard it from his son. He said, “It destroyed my father because he said he was so shamed in front of the rest of the community because they didn’t think that he was a person of worth that they had to take care of his family for him.”

C. Neal Johnson, from an Interview Oct. 8 at a Partners Worldwide Conference in Grand Rapids.

In a recent article in World magazine, Acton senior fellow Marvin Olasky urged evangelical minister Jim Wallis to drop the pretense of being post-partisan. Olasky, World magazine’s editor-in-chief, went on to assert that (1) Wallis’s organization, Sojourners, received money from the foundation of secular-leftist George Soros, and that (2) Wallis had lent the Sojourners mailing list to the Obama campaign.

In an interview here, Wallis appears to deny these charges. But now former Acton research fellow Jay Richards has followed up with some additional findings in a new piece at NRO. The findings strongly support Olasky’s claims, and make it all the more unclear why Wallis would respond to them by denying them and calling Olasky a professional liar.

Richards has been keeping tabs on Wallis for a while now. In an October 2005 review of God’s Politics, Richards shows how Wallis sits squarely on the left and has even capitulated to the secular left on key social issues. The book review also examines Wallis’s questionable biblical exegesis as well as some of the economic fallacies that drive much of Wallis’s political thinking.

Wallis may mean well, but the big-government policies he advocates have been a wrecking ball to the very communities he seeks to help. An Acton/Coldwater video short examines why the left’s approach to poverty alleviation has done so much harm. It’s called How not to Help the Poor.

Simon Johnson and Peter Boone wrote an interesting article the UK Telegraph Saturday called “The New Feudal Overlords of Europe will be the bankers of the ECB.”
Johnson is also the co-author along with James Kwak of a thoughtful and provocative book 13 Bankers as well as a blog on economics. Also on the ECB see my colleague Sam Gregg’s Piece at Public Discourse

Using Hayek’s famous phrase “The Road to Serfdom” Johnson and Boone argue the demise of Europe will not be the welfare state and the growth of government as Hayek predicted, but rather a “financial elite gone awry” They write:

Hayek had the sign and the destination right, but was wrong about the mechanism. Unregulated finance, the ideology of unfettered free markets, and state capture by corporate interests are what ended up undermining democracy both in North America and in Europe. All industrialised countries are at risk, but it’s the eurozone – with its vulnerable structures – that points most clearly to our potentially unpleasant collective futures.

As a result of the continuing euro crisis, the European Central Bank (ECB) now finds itself buying up the debt of all the weaker eurozone governments, making it the – perhaps unwittingly – feudal boss of Europe. In the coming years, the ECB and the European Union will dictate policy. The policy elite who run these structures – along with their allies in the private sector – are your new overlords

It is arguable who exactly are the peasants, the vassals and the lords under this model – and what services will end up being exchanged, but there is no question we are seeing a sea change in the post-war system of property, power and prosperity across Western Europe, just as Hayek feared. An overwhelming debt burden will bring down even the proudest people.

The ECB-EU approach will not return countries to reasonable levels of growth – the debt overhang is simply too large. The southern and western periphery of the eurozone cannot grow out of their debts under these arrangements and so will stumble from stabilisation programme to stabilisation programme – as did Latin America in the 1980s. This is bound to lead to hostile politics, social unrest and more economic crises.

The debt crisis must be addressed and I don’t disagree with their assertion that corporate-government collusion is a serious problem (See my article on Davos Capitalism) though I am unclear on how “Unregulated finance, the ideology of unfettered free markets, and state capture by corporate interests” exactly go together, or what they mean by “unfettered free markets.” Since Johnson and Kwak argue in 13 Bankers that we’ve had a type of oligarchic capitalism and Johnson and Boone matter of factly talk about “welfare socialism” I assume they aren’t arguing that the Europe or the US have had laissez faire free markets over the last decades, so I am not exactly sure what they mean. But on to their main points.

Johnson and Boone argue that current debt levels and the lack of political will to do anything about it will end up wreaking havoc on EU countries and ultimately on the US and the world.

The UK and US need to prepare themselves for more storms. The United States will be in the pleasant position as the world’s safe haven, but this will only encourage America’s profligate politicians to spend more and build more debt.

The UK will bear much more pain from euro devaluation and financial dislocation, all exacerbated by its own large deficit and debts. We might well see one more invasion across the channel, this time by bond vigilantes who question Britain’s ability to rein in inflation as it builds too large debts.

At the end of this great tumult, Europe and the UK will have sound fiscal regimes. Debt will be defaulted on or inflated away, and nations will have dramatically cut spending.

Hayek’s predicted demise of western society as he knew it will prove correct, but welfare socialism will prove the victim, erased by a political and financial elite gone awry.

Interesting and worrying stuff and the article is well worth reading as is 13 Bankers. But one thing the authors seem to ignore in this piece is that while welfare socialism may be the victim of the collapse (not a bad thing in my estimation), it is fully a culprit as well.

It is precisely a massive welfare state that is a part of the problem. It not only requires outlandish and unsustainable spending on the parts of governments who are afraid to address the challenge lest they lose popular support. But it also encourages a culture of irresponsibility, and inculcates a sentiment in the population that you can maintain an pleasant middle class life indefinitely without actually having to produce goods and services that people want and need. They suggest several austere measures as a solution but doubt the political will to achieve it. What may be really needed is a complete rethinking of the role of government and the whole idea of the current welfare state. That would not only require political courage, but cultural rejuvenation and this is something neither politicians nor bankers can provide.

A few weeks ago Hunter Baker posted some thoughts on secularism and poverty, in which he wrote of the common notion that since private charity, particularly church-based care, had failed to end poverty, it seems only prudent to let the government have its chance.

Hunter points out some of the critically important elements in creating a culture of prosperity and abundance, what Micah Watson calls “cultural capital.”

But it’s worth examining in more detail the point of departure, that is, considering the relationship between the church’s approach to charity and the creation of the welfare state. Lester DeKoster and Gerard Berghoef write of this in a brief essay contained in their book, The Deacons Handbook: A Manual of Stewardship, first published in 1980.

DeKoster and Berghoef argue in “The Church and the Welfare State” that “The Church is largely responsible for the coming of the modern welfare community.” But they also contend that the diaconal office is the key to answering the challenge posed by the welfare state: “The Church could be largely responsible for purging welfare of its faults and problems. IF enough deacons caught the vision!”

The church helped to bring about the welfare state in two ways. First, the Church embodied the idea of loving self-sacrifice in service of others. “The Word which the Church proclaims demands charity and justice for the poor. As this Word has permeated at least the Western world, an alerted public conscience has demanded public welfare,” write DeKoster and Berghoef. “The Church is the parent of the welfare community.”

But this “welfare community” became secularized when the Church “did not, and perhaps in some respects could not, measure up to her own ideals. Not all the starving were fed, not all of the homeless given shelter, not all of the oppressed and exploited relieved. The cries of the needy ascended to heaven. The Lord answered with the welfare state. The government undertakes to do what the Church demands and then fails to achieve by herself.”

In this sense, the welfare state is understood to be God’s preservational (thus imperfect) answer to the failed duty of the Church:

Thus the Church is, both by commission and by omission, author of the welfare state. Deacons start from here. Government has undertaken to do what conscience, tutored out of the Scriptures, demands but fails, through the Church, entirely to achieve.

In the brief essay Berghoef and DeKoster go on to outline some practical steps that can be taken to address this failing and rein in the scope of governmental responsibility. Some of these specifics need updating given what has happened in the United States over the last thirty years. But the vision of The Deacons Handbook, that the core of the answer lies in the diaconate, is a worthy and compelling insight.

Hunter will be pleased to note that among the practical advice given by Berghoef and DeKoster is that the meaning of the First Amendment needs to be reconsidered. Their advice for the deacon? “Do a study of what is so readily called ‘the separation of Church and state’.” This aligns with the argument Hunter makes in his new book, The End of Secularism.

This much remains true:

What is important, with an eye on tomorrow, is to discern what constructive relations may be developed between alert diaconates and public welfare. And it is immediately obvious that diaconates are uniquely qualified to amend what are commonly perceived as defects in the welfare system.

Check out an excerpt from the original edition of The Deacons Handbook containing the essay, “The Church and the Welfare State.” And sign up over at Christian’s Library Press to keep informed about upcoming releases in 2010, including new editions of The Deacons Handbook, The Elders Handbook, and more.

Deacons Handbook Excerpt

Mark Tooley pens another brilliant critique of the latest endeavors of the religious left in this piece titled “God’s Welfare State” in FrontPage Magazine. The commentary is a response marked with reason and clarity to left-leaning interfaith groups who are calling for more government programs and initiatives to tackle poverty. Tooley also notes in his piece that the signers of the letter calling for Senator John McCain and Senator Barack Obama to address their party conventions with a ten year plan to end poverty, are the usual suspects who equate “The federal welfare state with God’s Kingdom.” Tooley always seems to have a knack at getting to the heart of the issue, and he concludes by simply noting:

The left-leaning religious officials, guided by 100 years of statist Social Gospel, want to wage a government-led coercive struggle against “poverty” in the abstract. But most of their religious traditions express God’s love for specific poor people, while emphasizing voluntary and relational charity towards the needy. This historic stance of these religions towards the poor understandably has less appeal to the Religious Left, which often is more preoccupied with political power than with concrete compassion.

The Summer issue of City Journal features a piece worth reading by Guy Sorman titled “Economics Does Not Lie.” The paper includes weighty arguments favoring a free market economic system and the author does a good job explaining the rationale of those who criticize a free economy. Sorman says:

If economics is finally a science, what, exactly, does it teach? With the help of Columbia University economist Pierre-André Chiappori, I have synthesized its findings into ten propositions. Almost all top economists—those who are recognized as such by their peers and who publish in the leading scientific journals—would endorse them (the exceptions are those like Joseph Stiglitz and Jeffrey Sachs, whose public pronouncements are more political than scientific). The more the public understands and embraces these propositions, the more prosperous the world will become.

These are the ten propositions put forward by Sorman:

1. The market economy is the most efficient of all economic systems.

2. Free trade helps economic development.

3. Good institutions help development. (governments & rule of law)

4. The best measure of a good economy is its growth.

5. Creative destruction is the engine of economic growth.

6. Monetary stability, too, is necessary for growth; inflation is always harmful.

7. Unemployment among unskilled workers is largely determined by how much labor costs.

8. While the welfare state is necessary in some form, it isn’t always effective.

9. The creation of complex financial markets has brought about economic progress.

10. Competition is usually desirable.

Sorman adds:

These ten propositions should guide all economic policymaking, and to an increasing degree they do, worldwide. Does this mean that we’ve reached an “end of history” in economics, to borrow a phrase made famous by Francis Fukuyama, by way of Hegel and Alexandre Kojève? In one sense, perhaps: economic science will never rediscover the virtues of hyperinflation or industrial nationalization. Some critics charge that economics is not a science in the way that, say, physics is—after all, economists can’t make precise predictions, as an exact science can. But this isn’t quite true: economists can predict that certain bad policies will lead necessarily to catastrophe. If economics, a human science, lacks the precision of physics, a natural one, it advances the same way—evolving from one theory to the next, each approximating a reality that eludes our complete grasp.

On a somewhat related note about economic policy, here is a review I wrote about the book Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity. The review appeared in the Fall 2007 issue of Religion and Liberty.

A call to end poverty through more spending by the federal government is forever professed by some candidates and politicians. Maybe, they say, if just more money was appropriated and distributed this time, the results and relief for those in financial need would be conclusively different? Former President Clinton at least ran for office as a “new Democrat,” went on to declare the end of the era of big government, and signed welfare reform. Clinton was the first Democrat to win consecutive elections to the presidency since Franklin D. Roosevelt, cracking the Republican Party’s hold on the White House.

Some young voters are attracted to Democratic Presidential Candidate Barack Obama because of his call to reshape society by empowering the federal government to spend even more on poverty programs. Young voters who are inspired by religious left icons are especially enamored with this not so new idea. Some older voters and still others who know their history are understandably hesitant to continue down that well traveled road.

Stephen Malanga reminds us once again in a recent piece in the City Journal that two parent married households are well equipped to overcome this trap. Malanga goes on to remind us that until the political sphere discusses the social and cultural plagues that promote poverty, “we can’t begin to take the necessary steps to reduce long term poverty.” Beginning in the 1960′s, another Democrat, the late former Senator Daniel Patrick Moynihan raised the issue of the emerging crisis of out of wedlock births and broken families and its relation to systemic poverty.

Fox News reports:

The nation’s poverty rate dropped last year, the first significant decline since President Bush took office. The Census Bureau reported Tuesday that 36.5 million Americans, or 12.3 percent — were living in poverty last year. That’s down from 12.6 percent in 2005. The median household income was $48,200, a slight increase from the previous year. But the number of people without health insurance also increased, to 47 million.

The last significant decline in the poverty rate came in 2000, during the Clinton administration. In 2005, the poverty rate dipped from 12.7 percent to 12.6 percent, but Census officials said that change was statistically insignificant.

The poverty numbers are good economic news at a time when financial markets have been rattled by a slumping housing market. However, the numbers released Tuesday represent economic conditions from a year ago.

The poverty level is the official measure used to decide eligibility for federal health, housing, nutrition and child care benefits. It differs by family size and makeup. For a family of four with two children, for example, the poverty level is $20,444. The poverty rate — the percentage of people living below poverty — helps shape the debate on the health of the nation’s economy.

Robert Rector, of the Heritage Foundation, reminds us of what it means to live as “the poor” in America:

The following are facts about persons defined as “poor” by the Census Bureau, taken from various government reports:

* Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

* Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.

* Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.

* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

* Nearly three-quarters of poor households own a car; 30 percent own two or more cars.

* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

* Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

Important items to remember:

(1) Those living “in poverty” is never a static population. People cycle in and out of poverty over time.
(2) Unemployment numbers remain steady. Both the number of unemployed persons (7.1 million) and the unemployment rate (4.6 percent) were about unchanged in July. The jobless rate has ranged
from 4.4 to 4.6 percent since September 2006. (Data from the Bureau of Labor Statistics)
(3) Raising the minimum wage will not reduce the poverty rate but increasing the number of jobs will in the short-term.
(4) The low-skilled labor market continues to experience job loss due to advances in technology (robots, “self-check out” lanes, etc.)
(5) There has been considerable job growth since 2003. On August 3, The Bureau Of Labor Statistics released new jobs figures. Since August 2003, more than 8.3 million jobs have been created, with more than 1.8 million jobs created over the twelve months ending in July. Our economy has now added jobs for 47 straight months.
(6) According to White House data:

(a) Real GDP Grew At A Strong 3.4 Percent In The Second Quarter Of 2007. The economy has now experienced nearly six years of uninterrupted growth, averaging 2.7 percent a year since 2001.

(b) Real After-Tax Per Capita Personal Income Has Risen By 11.4 Percent

(c) Real Wages Rose 1.3 Percent Over The 12 Months Ending In June. This is faster than the average rate during the 1990s, and it means an extra $782 in the past year for a family with two average wage earners.

(d) Since The First Quarter Of 2001, Productivity Growth Has Averaged 2.8 Percent Per Year. This is well above the average productivity growth in the 1990s, 1980s, and 1970s.

In the end, the current poverty rate reduction is simply a result of a combination of the factors listed above. In order to continue reductions in poverty the business sector needs more freedom to create jobs to meet the needs of our changing communities. Tax burdens and frivolous government regulation continue to stifle entrepreneurial creativity and innovation. Additionally, the moral dimensions of poverty need continued attention by the various mediating institutions like the church and other non-profits. Poverty is multi-layered and material solutions alone will not bring about long-term reductions.

Blog author: jballor
posted by on Friday, August 10, 2007

Here are some book reviews of note from recent weeks that you may find to be of interest: