Acton Institute PowerBlog - Entries tagged as economic stimulus package

Victory for Government Tinkering?

Thursday, June 12, 2008

The WSJ reports, to the relief of the White House and Capitol Hill, no doubt: “U.S. retail sales increased in May, rising double the rate expected in a sign consumers were using stimulus payments and that the economy might not be as weak as feared.” Whether or not this is really evidence of the “success” of the government stimulus package, you can be sure that it will be proclaimed as such from on high over the next days and weeks.

We can have a good debate about the best place to send your charitable dollars (and the Samaritan Guide is a great place to start that conversation), but at least here’s an example of someone who didn’t run right out and buy an air conditioner or a flat-panel HDTV.

(Marc, it looks like the government’s fears may have been misplaced. You can finally rest easy.)

Posted by Jordan J. Ballor in Business and Society at 10:36 | Comments (5) | Trackback

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consumers, economic stimulus package, samaritan guide, spending

An Advertising Stimulus

Monday, April 28, 2008

One sector of the American public that hasn’t missed out on the government’s purpose for the economic stimulus package is the advertising and marketing industry. Savvy marketers are targeting sales and special offers to the federal rebate checks, which start to go out today.

One sector of the economy especially banking on how people will spend their stimulus rebates is the automobile industry. Here, for instance, is a local car dealer’s ad specifically targeted to the stimulus package:

I’ve seen another major car ad that is currently running nationwide featuring the advice of an economist to a young car buyer. The young buyer is presumably saving a great deal of money on the new car through a special cash back incentive or zero-percent financing or some such other offer. What should the buyer do with all the money he’s saving? Go out and buy something else?

No, says the wise economist. Save it or pay off credit card debt. Of course, the economist doesn’t give the really solid advice, which would be to forgo buying a new car in the first place and taking on all that new debt. Dave Ramsey, a guru of financial stewardship, consistently exposes the lie that financing the purchase of a new car, no matter what the incentives, is a good use of money. As Dave notes, it’s no coincidence that the financing arms of automobile manufacturers are generally among the more profitable aspects of the business.

It’s no surprise that auto sales are often an economic bellwether, since new car payments are typically one of the easiest things to put off in tough times. These are also precisely the kinds of payments that folks facing credit card debt and dwindling savings accounts should be looking to avoid when spending their stimulus rebate.

Posted by Jordan J. Ballor in Business and Society at 10:24 | Leave a comment | Trackback

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automakers, debt, economic stimulus package, financing, rebate checks

A Newsworthy Stimulus

Friday, April 11, 2008

Late last month I argued that recipients of the federal government’s stimulus package “should use this rebate money as they see fit, since they are the ones most familiar with their own situations and their own needs. Consider giving part of the money to charity or saving, paying off debt or investing.” Now other voices are giving similar advice, recommending saving rather than spending.

Rick Haglund, a Michigan business columnist for the Grand Rapids Press, notes that “Some saving measures can go a little too far, though. I recently heard a personal financial consultant say people can save by no longer buying that cup of coffee and newspaper on the way to work.”

“Give up the coffee, but please, please keep buying the paper. The newspaper business is in a terrible financial state,” he writes. Haglund thinks that newspapers are more important to the country than coffee...a debatable proposition. Coffee, not oil, might well be the lifeblood of American enterprise.

But the economic status of newspaper publishing is in a strange place. I’ve been getting the weekend paper for a year or so, and when I renewed I received a call from the paper just to tell me that I’d be getting the rest of the week for free (a good thing too, or I would have missed Haglund’s column).

It reminded me of getting a postcard in the mail from the government telling me to expect a rebate...no notice necessary, just send the free stuff and the money. I don’t think it cost the Grand Rapids Press millions of dollars to make the phone calls, though (it cost the feds $42 million to mail out those inane little rebate notices).

In any case, it makes more sense for many newspapers to give their issues away to get a boost in circulation numbers than it does to count on the income from subscriptions. I also recently saw one of the narrowest daily newspapers I had ever seen last weekend, part of the trend to cut printing costs. (I can’t complain too much, though, since the Port Huron Times Herald has published more than one of my commentaries. Keep up the good work!)

Of course, some folks, like Betty J. Mazur, are going to do just what the government wants them to do with the money. “I’m going to buy new clothing with my check,” she said. (The piece linked above is in part about how it is necessary to file federal taxes for 2007 in order to get the 2008 rebate. Marketplace discusses that, and also debunks some myths about the rebate, here.)

Oh, and don’t forget to blame conservative theology for the credit crisis. After all, it seems as if adherents to so-called “conservative” theology don’t save as much as they ought.

How any decent sociologist could have this reaction is beyond me: “Keister was surprised that when demographic factors — such as education, age and race — were held as constant, religion still proved to be an influential factor in wealth accumulation” (emphasis added).

Amazing, just amazing. Can you dare admit that religious beliefs really do influence behavior?

Keister says a typical “conservative Protestant” might be a member of the Assemblies of God, Churches of Christ, Nazarene and Pentecostal churches. I guess they’ve forgotten what John Wesley said.

Posted by Jordan J. Ballor in Business and Society at 07:44 | Leave a comment | Trackback

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coffee, economic stimulus package, federal government, government, newspapers, saving, spending, theology

Spending the Stimulus

Tuesday, April 1, 2008

Last week the Providence Journal ran a piece by me on the forthcoming “rebate” checks from the government intended to be an economic stimulus, “The mandate is to ‘spend all you can’.” I take issue with the idea that the government gives us money that is our own in the first place, and then tells us how we ought to spend it: on consumables and retail goods to spur growth in the economy.

Instead, I propose that people “should use this rebate money as they see fit, since they are the ones most familiar with their own situations and their own needs. Consider giving part of the money to charity or saving, paying off debt or investing. And if it makes sense for you and your situation, you should feel free to buy that hi-def TV if you so desire.”

“But you certainly should not feel obligated to do so as if mere consumption is a civic responsibility,” I add.

The real problem with the package is that it perpetuates a view of the government’s role in the economy as the final arbiter of how markets ought to work and what people should be doing with their money. No doubt this is in part a response to the idea that the federal government in general, and the president in particular, has a primary formative influence on the shape and health of the nation’s economy.

Alasdair MacIntyre puts it this way,

Government insists more and more that its civil servants themselves have the kind of education that will qualify them as experts. It more and more recruits those who claim to be experts into its civil service.... Government itself becomes a hierarchy of bureaucratic managers, and the major justification advanced for the intervention of government in society is the contention that government has resources of competence which most citizens do not possess.

Thus comes the idea that the president is a kind of “economist in chief,” who directs the nation’s and the world’s markets by executive decree (compare that idea with the presidential job description given by the Concerned Women for America here).

Update: It’s 3 am...and this time the crisis is economic...