economyNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: ‘The Economy’ (aka Gross National Product)

What it Means: When people refer to “the economy” they are usually referring to a particular idea—Gross Domestic Product (GDP)—which is itself simply an economic metric. GDP is often used as a single number that “measures” the economy. Imagine you wanted to put a price tag on the value of all the final goods and services produced by every sector of the economy (all of the crops grown, all of the lattes served at the coffee shop, all of the hours billed by lawyers, etc). The total number you’d put on the price tag is the GDP.

Why it Matters: Humans have seemingly unlimited wants and needs—but a limited amount of resources. This is known as scarcity, and it’s the fundamental problem in economics. The primary way we solve this problem is through market exchanges: you make something I want or need and I give you something you want or need in return (we do this indirectly through the use of money). The occurrence of all of these exchanges is what we call “the economy,” which is why we can use the metric that measures the sum of all of these exchanges—GDP—as a synonym. When we say the economy is growing/shrinking, we are saying the total value of the goods and services being exchanged (GDP) is increasing/decreasing.

An economic unit (whether a family, country, etc.) is generally better off when everyone is able to meet all (or nearly all) of their material needs and many of their material non-necessary desires. That is why economic growth is so important. While the issue is complex and requires some nuance to fully explain, the simplistic answer is that economic growth matters because people continue to have babies.
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N_GodDollar_400pxNote: This is the introductory post to a series that explains economic terms and concepts from a Christian perspective. You can find the most recent list of entries listed below under “Latest entries.”

I call it the “Dow Conundrum.” At least once a week, for as long as I can remember, I’ve heard about the Dow Jones Industrial Index (DJIA). But I didn’t really know what it meant or why it mattered. So a few years ago, I decided to ask a range of people, from entrepreneurs to teenagers, if they had heard of the DJIA (all had), if they knew what it measured (most knew it had to do with the stock market), and why it mattered so much that it was mentioned in news reports every day (none of them – not one — could explain it’s significance).

And it’s wasn’t that I picked a particularly economically illiterate sample for my experiment. A couple of years ago Adam Davidson of NPR’s Planet Money wrote,

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In a short video that recently went viral, Academy Award-winning actor Denzel Washington offers some spontaneous career advice to a group of young actors.

Although the setting is informal and his remarks are off-the-cuff and unrefined — sure to beg questions among theological nit-pickers — his general view aligns rather well with a healthy approach to Christian stewardship.

Watch the video here:

In keeping with the theme of “All is Gift” that runs throughout Acton’s new series, For the Life of the World, Washington emphasizes that we are created to be gift-givers, and that our gifts are not to be neglected due to our own idleness and fear, and neither are they to abused for our own personal privilege or gain: (more…)

pacifierAlana Newman knows the pain caused by the fertility industry. She is a donor-conceived child (via sperm donation) and an egg donor. Newman is also the founder of AnonymousUs.org, which focuses on shedding light on the fertility industry.

Newman has written “Creating A Marketplace of Children: A Donor-Conceived Woman Explains the Harms of Third-Party Reproduction,” in which she shares the questions she had as a child about her own conception, and the painful reality of egg donation. She explains that one reason she chose to donate her own eggs when she was 20 years old was that it was “open:” the child conceived via her eggs could contact her in the future is he/she so wished. Of course, that “openness” only went one way; the woman donating her eggs would never be able to anything more than whether a boy or girl had been conceived via her “donation.”

Of course, Newman admits, the money was a big draw as well. She responded to a Craigslist (Craigslist!) ad:

Because I was young, and without any other marketable skills, the $8,000 advertised by the fertility clinic made selling my eggs outrageously more attractive than other job options. I believed that if I sold my eggs as an open ID donor, I would improve the system and make the world a better place. I also envisioned what I could do with that kind of money—record an album or visit Europe. It seemed like a needle-length journey to a whole new social class.

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Blog author: jcarter
Thursday, May 29, 2014
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Europe’s Lurch Right Is Bad for the Jews … and the United States
Jonathan S. Tobin, Commentary

The huge gains made by far-right nationalist parties in the European Union elections last week have a lot of people on the continent and elsewhere scared.

Unlikely Allies Uniting to Fight School Changes
Motoko Rich, New York Times

With tensions running high over issues surrounding academic benchmarks, standardized testing and performance evaluations for educators, unlikely coalitions of teachers, lawmakers and parents from the left and right are increasingly banding together to push back against what they see as onerous changes in education policy. Some have Tea Party Republicans and teachers unions on the same side.

Our Moral Obligation to Vote
Bishop James D. Conley, STL, Crisis Magazine

From the very beginning, Catholics have played a vital role in the success of the American experiment. And our involvement in public and political life is still essential to the well-being of our nation.

Why is Distributism So Intolerable?
Gregory Pine, First Things

Arguments for Distributism have become predictable. Most include an historical homage to long established tradition: Look for mention of guilds, agrarian reform, and Aristotle’s theory of the polis. Catholic authors typically proceed to locate their claims in the magisterial teaching of modern Catholic Social Teaching.

Actress-Journalist America Ferrera

Actress-Journalist America Ferrera

A bit of honesty, please. The premium network Showtime is airing an original series, The Years of Living Dangerously, which pits such intrepid reporters as Hollywood B-list hotties Jessica Alba, Olivia Munn and America Ferrera against climate-change “deniers.” The May 19 episode featured Ms. Ferrera attempting to grill The Heartland Institute’s James Taylor (full disclosure: Taylor is a professional colleague and cigar buddy) on his efforts to roll back renewable energy standards on a state-by-state basis. On this, more below.

In the meantime, clergy, nuns and other religious shareholders are rending their respective garments over lobbying and political contributions performed by companies in which they invest. Never mind the religious shareholders directly benefit from corporate lobbying and political donations, what really matters to them is whether the companies’ efforts kowtow to the progressive agenda.

Witness the following religious groups and their 2014 shareholder resolutions submitted to the following companies: (more…)

indexActon’s Director of Research, Samuel Gregg, recently wrote an article at Aleteia about the recent Great Recession and Former president of the Federal Reserve Bank of New York and Treasury Secretary Timothy Geithner’s book, Stress Test: Reflections on Financial Crises. Gregg begins by noting that economists and historians are still speculating about the causes of the Great Depression and doesn’t doubt that similar debates will occur about more recent economic decline. He says, “it’s not surprising that some of those who were closets to the policy epicenter of the maelstrom are anxious to get their version of events on the record” and it’s hardly surprising that now Geithner is talking about it. Gregg continues:

Stress Test is written in the regrettably chatty, forced-informality manner of too many memoirs by politicians and public officials in our age of excessive casualness, selfies, and perpetual adolescence. For all that, however, Geithner does make a sincere effort to explain himself and his actions — even if his account won’t convince everyone.

Judging from this text (but also from other books written on the financial crisis by other players), Geithner comes across as an intelligent, decent man who found himself dealing with incredibly difficult problems in an environment full of Zeus-sized egos inside the self-referential bubble of Washington, D.C. “I wasn’t,” he writes, “a banker, an economist, a politician, or even a Democrat” (1). Indeed Geithner stresses over and over again his independence. The Left, according to Geithner, saw him as “Wall Street’s wingmen” while Wall Street thought he and others were “Che Guevaras in suits” (20). (more…)