Quote of the Week

Tuesday, December 7, AD 2010

So I’ve been reading Fintan O’Toole’s Enough is Enough: How to Build a New Republic on my Kindle recently. I know what you’re thinking: why would someone read a book about how to make Irish politics more left-wing when he is neither 1) Irish nor 2) left-wing? And it’s true, I have a problem; I need help.

But leave that aside for now. I’m currently on a section in which O’Toole rails against the large place the Catholic Church has in providing health care in Ireland. It seems that the Irish bishops have actually had the temerity to oppose increased government involvement in health care, as this would interfere with the Church’s role. For example, in 1948 the Bishops opposed a government plan to provide free health care to children and new mothers. O’Toole quotes Bishop Cornelius Lucey of Cork laying out the Church’s view on the part the state should play in health care:

What should we expect from the State? Help to enable us to help ourselves. Thus, instead of providing directly through its own agencies free housing for all, free health services for all, free school meals for all, etc., it should rather see to it that these are available and that people can afford to pay for them. Thus the real answer to the problem of the man who cannot afford medical care for his wife and children is not a free mother and child service for all, but a rise in wages – or cut in taxes – sufficient to enable him to pay.

Milton Friedman couldn’t have said it better himself.

I note this because you sometimes hear it said that American political culture is fundamentally protestant, and that Catholics who believe in limited government are somehow buying into protestant individualist notions. Correct me if I’m wrong, though, but my impression is that Ireland circa 1948 was pretty Catholic.

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18 Responses to Quote of the Week

  • On a slightly more serious note, I should say that when he isn’t attacking the Catholic Church O’Toole’s book is pretty good. The Irish really are getting shafted by bankers, the EU, and their own government, and many of O’Toole’s proposals (more localism, decentralization, etc.) are music to my ears.

  • Blackadder,

    Do you know how much an increase in wages would be required for the majority of families to be able to afford their own health insurance? It would seem to me to be quite a large increase, but you might have a sense of the number.

  • WJ, when you receive medical insurance from your employer, it is part of your compensation, an in-kind addition to your wages.

  • WJ,

    A majority of families already pay for their own health insurance, so the answer would be $0.

    Of course I would not want to settle for a majority of families being able to afford their own health insurance. All families should be able to afford it. My guess though is that if you changed the way the health care payment system is structured you could bring down costs such that it wouldn’t take a big increase in wages for everyone to be able to afford it.

  • Art is of course right WJ. We owe our present deranged pairing of health insurance with employment to the confiscatory income tax rates of World War II. Unions bargained for good health insurance plans for their members instead of wage increases, due to the taxes their members would have had to pay on increased wages.

  • Awaiting Morning Minion’s explanation on how Ireland came under the influence of Calvinism…

  • Awaiting Morning Minion’s explanation on how Ireland came under the influence of Calvinism…

    Easy enough. Via Jansenism. 😉

    Also, IMO it is an error to conflate health care and health insurance. One could easily argue that a large part of why the cost health care visits and procedures are high is the proliferation of health insurance for a few generations. If things like regular doctors visits were never included in plans, and the plans were geared more towards the catastrophic health issues, I doubt the YoY cost of health care would be nearly as high.

  • It would very much help the reader’s level of cognitive dissonance if you refrained from using the phrase “free healthcare”. Nothing is ever free, least of all when government attempts to provide it.

  • RL, whatever you take out of health insurance, I think regular doctor’s visits probably shouldn’t be one of them. It’s the one form of health care that we actually want consumed more. Plus, as it isn’t an emergency service, insurers can limit access to in-network clinics which keeps costs down.

    I’ve become cynical about significantly reducing the cost of health care. End-of-life care is the biggest cost and you can’t control those unless you let people die. The public won’t stand for that, especially not from a private insurer, unless you convince them that the care simply isn’t available. I suspect that’s how countries like Canada controls their costs: “Sorry, we’ve done everything we can. But there are hospitals in the US that can do more if you’re willing to spend out-of-pocket.”

  • I guess I was operating under the assumption that most people who have health insurance do get it from their employer. (I could be mistaken about this as well–I have no strong views on health insurance other than a desire that it be less expensive!) If we were to divorce health insurance from employment, how much higher would wages have to be so as to allow individuals to buy their own insurance? Would this number still be $0? I am assuming–but maybe incorrectly–that companies, etc. might get discounted rates based on scale, but that if the purchase were to devolve onto individuals, it would be at a higher cost to them.

    I mean, do you really think that, given the cost-structure currently in place, it would be better if individuals were left on their own to purchase insurance? (I’m not being argumentative here; I just want to see whether you–Blackadder and Art Deco–think that this proposal above is in principle workable today, or whether other things would have to change before it became possible.)

  • WJ,

    I think the point that’s being made is that employers already factor in health-care costs. For example, my employer will provide us with a worksheet that basically lays out our total compensation, including benefits, and that amount is obviously a lot more than what our actual salary is. So employers would presumably simply just makeup in salary what they are no longer covering in health benefits. So essentially the net change to them would be zero.

  • I suspect Blackadder is in error. Most people receive medical insurance from their employer. It is the accounting convention that the cost is partially expressed as a charge against the employee’s nominal salary.

    There are certain advantages to having medical insurance conjoined to one’s employment. A collection of working adults generally does not include people who are old and/or disabled and the federal government has for some time been willing to assume the cost of the most ruinously expensive treatment for the able bodied (kidney dialysis). A body of employees can form a viable actuarial pool.

    The trouble you get with general reliance on insurance purchased by individual households (and Mr. McClarey has spoken of replacing Medicaid and Medicare with vouchers to purchase household insurance) is the problem you get with the market for long-term care insurance as we speak – a considerable mass of households will be deemed uninsurable risks making necessary some sort of financing arrangement apart from and outside of the market for household insurance. (Make necessary in our world, not in the world of Ayn Rand-bots).

    Memo to RR: nursing home care currently accounts for only about 11% of the some of expenditures on medical care and allied services.

  • http://reason.tv/video/show/get-some

    I know; I hate a lot of Reason Magazine too. Its name is condescending and pretentious, but here’s the rub: as much as we don’t like him, he has a point- not the whole answer, but a valid point.

    A while back there was a discussion on the right to adequate health care, while I agree with that right (and don’t think that ADEQUATE health care is really up for grabs or disagreed with much in the Church), I don’t agree that people who could afford health insurance, who choose to spend the money on other things, should get to reap the fruits of other’s labor, without any reciprocity for them. This seems to be beyond orthodoxy vs. individualist heresy.

  • Art Deco, I wasn’t even thinking about nursing homes. I mean those expensive treatments that aren’t expected to extend life much. More than half the Medicare budget is spent on patients who will die within 2 months.

  • “Easy enough. Via Jansenism. ”

    Not true. Jansenism never gained significant traction in Ireland.

    “Jansenism”. The Oxford Companion to Irish History. 2007.

    “Jansenism was viewed with great suspicion by Rome, and 17th-century Irish synods toed the Roman line. Indeed, while its moral rigorism made it attractive to elements of the Counter-Reformation church, Jansenism’s theological and political radicalism alienated both local hierarchies and Catholic monarchs. This was especially the case in France and most Irish clerical students there associated with milieux hostile to the movement. Indeed their anti-Jansenist opinions were singled out for criticism by the pro-Jansenist journal Nouvelles ecclésiastiques, Irish clerics, in general, being more attracted to Jesuit-style humanism. The success of the anti-Jansenist bull Unigenitus (1713) marginalized the movement but it survived as a popular millenarian-cum-miracle cult. Neither as a theology nor as a political attitude did Jansenism recommend itself to the Irish Catholic community, either at home or abroad. The frequent claim that Irish Catholicism was Jansenist-influenced springs from the tendency to confuse Jansenism with mere moral rigorism.”

    Dr Thomas O’Connor. Ph.D.
    Senior Lecturer – Department of History, National University of Ireland
    https://history.nuim.ie/staff/oconnorthomas

    author of:

    _Irish Jansenists 1600-1670: politics and religion in Flanders, France, Ireland and Rome (Dublin, 2008)
    _Strangers to Citizens: the Irish in Europe 1600-1800 (Dublin, 2008)
    _An Irish Jansenist in seventeenth-century France: John Callaghan 1605-54 (Dublin, 2005)
    _An Irish Theologian in Enlightenment Europe: Luke Joseph Hooke 1714-96 (Dublin, 1995)

    Healy, John. Maynooth College : its centenary history (1895). Dublin : Browne & Nolan, 1895.

    “During the eighteenth century many of the most eminent Churchmen in France were, to some extent, tinctured with these Jansenistic views, even when repudiating the Jansenistic errors regarding the operation of grace and free will. But although so many of our Irish ecclesiastics were educated in France during the eighteenth century, none of those who came to Ireland ever showed the slightest trace of this Jansenistic influence, either in their writings or their sermons. Nor has any respectable authority asserted, so far as we know, that the French Professors of Maynooth were in any way tinged with the spirit of Jansenism.”

    Most Rev. John Healy, D.D., LL.D., M.R.I.A

  • If anyone is interested in more of Dr. Lucey’s thoughts on the social question, here’s a pamphlet he wrote in the 1940s…

    http://url.ie/8hix

  • Umm, thanks for this, Shane. I’m sorry to have wasted your time though. I was just being sarcastic. A terribly thing about blogs where you have a relatively steady readership and commentariat is that we assume everyone else knows where we tend to stand on issues and where those who differ generally stand. My comment was just a continuation of the previous quip. 🙂

  • heh.

    Morning’s Minion says:
    December 17, 2010 at 3:15 pm

    From the article Colbert quoted, it would appear so. That’s nothing unusual with American Catholics brainwashed by the dominant Protestant culture, and tinged anyway with Irish Jansenism.

Is Inflation Hiding?

Monday, December 6, AD 2010

There’s an old saying, which I’ve seen attributed to every from Daniel Patrick Moynihan, to the effect that while a man is entitled to his own opinion he is not entitled to his own facts. This saying would seem to be particularly relevant to current arguments about the Federal Reserve and monetary stimulus. As I noted in my last post, some commentators have been warning for years that the Fed’s actions would cause a return to the high inflation of the 1970s, if not to 1920s Germany. Yet more than two years on, this inflation has failed to materialize.

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20 Responses to Is Inflation Hiding?

  • Don’t believe the federal stats. Prices have gone up sharply on virtually all commodities as any grocery store or retail shopper knows. Inflation is in high gear and it’s a missed story in the lamestream media.

  • Joe,

    You didn’t even read the post, did you?

  • Now of course it is always good to take government figures with a grain of salt.

    No, it is good to know how to read the government’s statistical reports. Unless you have reason to believe they cook the books or that some private agency has a methodologically superior process, you should take the government’s reports as the gold standard.

    As for Messrs. Green, Jones, Medaille, ShadowStats: some people are bound and determined.

  • A good and helpful post–speaking as someone who is usually pretty skittish about inflation.

  • I’m no economist, but I find Steve Keen’s deflationary forecast the most convincing of all the predictions I’ve read.

    Of course, the government can cause inflation if it prints enough money, by definition. And they’d probably like to inflate away some of the massive debt they’ve taken on. But Keen suggests (as I understand his calculations) that serious inflation would require upwards of 20 trillion extra dollars printed and dumped on the streets, and I don’t see how they can do that without causing panic and problems with China.

    It’s also occurred to me that it might be possible to have simultaneous inflation — in the sense of people losing faith in the fiat money and fleeing it for gold or other tangibles — and deflation — in the general economic sense of individuals and companies tightening their budgets and producing less. So sometimes I think the inflation and deflation forecasters are talking about two different things. After all, if it were as simple as having the right volume of money supply, then that would mean there’s a sweet spot where if they print juuuuust enough dollars, everything will be peachy. It seems more likely to me that we could have inflation at any particular “healthy” level we choose, and still see the economy and incomes shrinking.

  • You may well be correct.

    The inflation-adjusted $13 trillion 2010 GDP would be $3 trillion in 1969 dollars.

    In the past two years, 314 banks and savings banks have failed with $650 billion in aggregate total assets. The FDI insurance losses were about $75 billion. Recently, FDIC reduced its estimate of projected aggregate losses (for this banking crisis) from $100 billion to $92 billion based on lower aggregate total assets in problem banks. “The Sun will come out tomorrow . . . ” la la la la la

    For the two years, unemployement rate has been a tad below 10%, but really it is about one-in-six. About 2 millions homes eventually will be lost to foreclosure.

    What caused the recession? Maybe someone should identify that and make sure it doesn’t happen again. That is above my pay garde. But, I will say, it was not high interest rates or declining money supplies. The FRB kept rates too low too long and HUD/FNM/FRE interference in housing markets provided excess liquidity and caused bubble housing prices . . .

    See: WSJ 12/3/2010: “Why Do We Have a Central Bank?” by Gerald P. O’Driscoll Jr. “There is no liquidity crisis now, however, and no justification for continued lender-of-last-resort activity. There are quite possibly still large unrecognized losses on banks’ balance sheets associated with the housing collapse and other unwise lending. These losses mean such institutions are in reality undercapitalized, not short of liquidity.”

    There is NO DEFLATION. There is disinflation in housing. Potential buyers will not bid because they think prices have (who knows how much) farther to fall. Trial lawyers abuse of the judicial foreclosure process (“if the glove don’t fit you must acquit.”) is adding uncertainty that will further hamper housing prices return to equilibrium and construction industry recovery. The 2009 housing market was artificially buoyed by fed tax credits and gummanament loan modification programs.

    One in six of we the people cannot afford to buy car and other big ticket items. No inflation there.

    In the wildest examples of the unprecedented housing bubble (you have amnesia from the S&L crisis of the late 1980’s and early 1990’s) in Merced, CA housing prices at the peak in early 2006 (Merced Case-Shiller data) were 311% of the January 2000 index of 100. That is six years. Let’s say inflation was 5% on average (compounded) over those six years. In that scenario, the housing prices would be on average 134% of the 2000 index NOT 311%.

    God willing, we’ll live to see who is correct. I bet no inflation. Obama will have his way. The economy will be in the “hurt locker” for about 10 more years.

  • Adder, yes, I read it. What’s your point? My comment stands.

  • Art Deco: Surely, you can’t be serious. Predicted response: “I am serious and don’t call me Shirley.”

    Believe the government stats?! Like we should believe the fabrications read by TelePrompTer from Our Beloved Leader? Or would you rather believe the facts being spread by Wikileaks?

  • Dear Sir:

    Can you explain why the Euro trades higher than the US Dollar. The EU seems to be in worse shape than we are. Also, I read all kinds of stories as to why gold is so high but I can’t seem to discern the truth. Could you shed some light on this as well? Thanks!

  • Adder, yes, I read it. What’s your point?

    In the post I deal precisely with the argument that commodity prices reflect a large increase in inflation.

  • Joe Green, the statistics are generated by several agencies, most prominently the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Bureau of the Census. These are, in turn, staffed with the permanent civil service. The Department of Commerce began generating and publishing statistics on economic activity since 1921 and has done so now for 90 years under administrations of both parties. Unless you have evidence they have been cooking the books, your complaint is of no account. Mr. ShadowStats fancies he produces better statistics at his desk than these three bureaux do with their large collection and analytical staff. I suppose that gets him through the day.

  • It seems to me that the main reason we had “deflation” in 2009 was due to gasoline/fuel prices coming down from the artificially inflated peak they reached in 2008 (when gas went over $4 a gallon).

  • The absence of evidence is just evidence of how well thought out and organized the conspiracy is.

  • Elaine,

    It wasn’t just the price of gas that fell in 2008/2009. This chart, for example, shows the inflation rate for the price of groceries as compared to core inflation for the past ten years (2010 is marked 1, 2009 is 2, and so on). The blue bars are for groceries, the red is core inflation. You’ll note that we had deflation for grocery prices in 2009.

    Now what you’re saying has an element of truth, in that if you look at the core inflation rate (which excludes food and energy prices but includes everything else), that number was positive in 2009. But it was just barely positive. And core inflation has been trending downward towards zero.

  • Art Deco, et al. Statistics, schmatistics. A million deaths are a statistics, one death a tragedy. Wasn’t that Stalin? Anyway, all I know is that when I fill up it’s $3.05 a gallon now, not $1.75 like it was a couple of years ago. Crude was around the same price per barrel. So who is pocketing the profits? OPEC? Exxon/Mobil. The state and the feds?

    The price of butter, eggs, milk, meat — all up substantially. Let the bureaucrats churn out all the numbers they want. Meaningless in a real world where paychecks don’t stretch as far and mac and cheese is becoming the staple at the dinner table. Anecdotes win the argument, not dry stats. Still, I’m not here to fight, merely weigh in with a couple of cents, which may be taken with grains of salt…Too many mixed metaphors; I’ll quit while I’m either even or even behind.

    Thanks for stimulating a discussion.

  • D.L. Jones:

    The price indices published by the U.S. Government are generated by the Bureau of Labor Statistics, not the Federal Reserve.

  • Taking housing out of the picture doesn’t change things much. Inflation is still low and falling.

  • Art Deco – That’s exactly what Jim Rogers says in his 2-part video interview above. I encourage folks to watch it.

More Money, Less Problems

Thursday, December 2, AD 2010

If the case for increased monetary stimulus could be summed up in one picture, it would be the above chart. For the last several decades, nominal spending in the U.S. has increased at a fairly steady rate, and businesses and individuals acted in the expectation that this trend would continue. Contracts were written, debts undertaken, and business ventures began under the assumption that there would be roughly 2% inflation per year. The lower total spending means that there is not enough money flowing through the system to fulfill these contracts and pay back these debts, which the result that you get lots of defaults, unemployment, and less economic growth. Monetary stimulus, such as the Fed’s QEII program, is aimed at returning nominal spending to trend, leading to lower unemployment, fewer defaults, and higher economic growth.

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30 Responses to More Money, Less Problems

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  • The house is really cold, the heater is on full-blast, but the windows of the house are also wide open.

  • Waiting for the Austrians to descend…

  • I admit to Austrian sympathies, but I am sufficiently encumbered by my BA in Economics to acknowledge uncertainty. Notwithstanding my general agreement with Hayek (less so Rothbard), I have to say what is most unappealing about the Austrians is their unhealthy obsession with orthodoxy in a field that is ill-suited for it.

    Thanks for your post, BA. Interesting.

  • This topic is appropriate for a Catholic weblog.

    QE2 is a “Hail Mary” pass. Nothing else has worked. We need Divine assistance.

    We will see if there results inflation or stagnation.

  • What is missing in the discussion is whether or not all this fresh money has resulted in wealth creation. I contend that it hasn’t. The money has been created and shoved through the financial system and allowed banks to pretend they are solvent while fueling a massive – but illusory – rise in stocks. The price of gold and other commodities tells you what has really happened – because there is so much more money around, money has become worth far less while the amount of wealth backing the money has, at best, had only a tiny increase (and my bet is that we’ve had a net loss of wealth since 2007 – but we need not quibble over that).

    We’ve been on this track since the end of the First World War – a war which cost a huge amount of life and a vast amount of wealth. Post-WWI, the world could either suffer through a generation of privation while wealth and lives were rebuilt but, instead, the world opted for easy money. The United States got the “Roaring 20’s” as a result. But it had to be paid for – and in 1929, we started paying. But rather than pay the full price, we went for even easier money…and got some illusory growth in the mid-30’s. Just as we were about to start paying the price, again, along comes WWII, which cost even more lives and wealth than WWI.

    Once again, we should have had to pay for it – but by happy coincidence, we had blown our industrial competition to pieces (literally) while we lucked in to a population boom fueled by advances in health care, especially among children. Instead of having to pay for the war, we got a free ride. Until, that is, the rest of the world rebuilt itself – then it was time for us to pay the piper and finally go through what we should have gone through in the 1920’s. Instead of doing that, we went entirely off the gold standard and went for the easiest of easy money – piling up fiat money and debt like no tomorrow. Never retrenching and building anew our agricultural, mining and manufacturing industries, but using fiat money and debt to buy such things from foreign lands.

    And, so, here we are – in 2010 with the economy seemingly stabilised, but our debt absolutely crushing, China teetering on the brink of financial melt down, Europe trying desperately to stave off sovereign default and our own financial system kept afloat by “extend and pretend” policies. And the solution some offer? Print and borrow more money! That will get us inflation, and that’s a good thing!

    Nonsense. We might hold it together for a while – but the complete collapse of this fiat money, usury-based economy is inevitable. You can’t borrow, print and spend your way to wealth. Wealth come from hard work, savings and careful investment and by no other means. Period. Print away, if you like – bail out a couple more European nations, if it suits you…but it won’t work; it can’t work. It is doomed. The good news is that once the crash completely happens, we’ll be able to reform our nation and get some common sense built back in to our financial house.

  • If you think there is no inflation, think again. The CPI excludes food and energy. It is heavily weighted to manufactured goods. Demand has fallen for those items due to unemployment and the stock market crash, and so prices have remained level. At the same time, however, food and energy have seen quite substantial price increases that are not measured in the CPI. My family shops wholesale, purchasing bulk commodities without individual packaging to save money. A case of bulk pork which cost $1.24/lb two years ago now costs $1.54/lb. A fifty pound bag of ADM All Montana flour cost a little over $8 two years ago, but now costs a little over $13. Sugar has gone from about $19 for a fifty pound bag has skyrocketed to $29. A case of #10 cans of fruit has gone from around $13-15 in 2008 now goes for $23-30.

    People can defer purchases of clothing, electronics, and other consumer goods, but not food and, to some extent, energy. Thus, prices of consumer goods remain flat due to demand, but food and energy increase due to monetary influences. Ultimately, the other markets will catch up to the realities of the huge increase in the money supply, but it will take time. Meanwhile, the government will continue to put out reports which deny the real effects of monetary policy.

  • Not to be pedantic but the title of this post should be “More Money, FEWER Problems”. If you can count “how many” (problems, jobs, dogs, rocks, etc.) the proper term is “fewer”. If you quantify a noun with “how much” (money, water, sugar, cement, etc.) the proper term is “less.”

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  • The CPI excludes food and energy.

    No it doesn’t. The regular CPI numbers include food and energy prices.

  • Not to be pedantic but the title of this post should be “More Money, FEWER Problems”

    If I thought more money would make some of the problems go away completely then fewer would be correct. But that’s not what I’m saying. Monetary stimulus won’t eliminate unemployment, for example, it will just lessen the unemployment problem. So less is proper.

  • From Wikipedia:
    “‘The road to hell is paved with good intentions'” is a proverb or aphorism. It is thought to have originated with Saint Bernard of Clairvaux who wrote, ‘L’enfer est plein de bonnes volontés et désirs’ (hell is full of good wishes and desires).”

    No one is questioning the monetary geniuses’ motives. It’s just they can’t match the performance record of that the stopped analog clock, which is correct twice each 24 hours.

    They’re again heaving that metaphorical pigskin 60+ yards down field and hoping this time their guy comes down with the ball!

    I wonder what odds they’re getting in Vegas.

  • Not to be pedantic but the title of this post should be “More Money, FEWER Problems”

    If I thought more money would make some of the problems go away completely then fewer would be correct. But that’s not what I’m saying. Monetary stimulus won’t eliminate unemployment, for example, it will just lessen the unemployment problem. So less is proper.

    Elaine is right, though, as to the proper grammar. If that is what you meant, then you should have said “more money, LESSENED problems”. This is the only aspect of your post that I am even marginally quaified to comment on.

  • The second paragraph should have been italicized, obviously, as I am quoting your response.

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  • Keynesian economic theory was discredited in the 1970s with stagflation. Why anybody follows it today is rather amazing. Printing fiat money (from nothing) and encouraging spending through borrowing (or extended unemployment benefits) is a recipe for disaster. Working, paying off debt(s), saving and investing is the wise path and the Austrian way. Common sense tells us this much.

  • “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem

    http://www.youtube.com/user/EconStories

  • Keynesian economic theory was discredited in the 1970s with stagflation. Why anybody follows it today is rather amazing.

    The Keynesian economic theory of the 1970s was discredited by stagflation, and hardly anyone follows it today. When someone refers to himself as a Keynesian today he typically means something quite different from what someone who called himself a Keynesian in the 1960s-70s would have meant (details here).

    On the other hand, I would say that the Austrian economic theory of someone like Rothbard/Bob Murphy is discredited by recent events (as well as by the Great Depression, Japan’s lost decade, etc.)

  • The presupposition that the economy can be centrally planned is a false.

    I would encourage folks to read the following excerpt by Dr. Murphy.

    http://books.google.com/books?id=B8JNKpXyiP0C&pg=PA104&dq=robert+patrick+murphy+depression&hl=en&ei=1_j-TKaVL9WDngf9rrnGCw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC0Q6AEwAA#v=onepage&q&f=false

    He has written another entire book on the Great Depression which I encourage folks to read and make their own judgment.

  • The presupposition that the economy can be centrally planned is a false.

    That would be salient in some other country. This country’s experience with central planning was limited to the first and second World Wars.

  • The presupposition that the economy can be centrally planned is a false.

    I agree with this, but like Art I fail to see the relevance to the current discussion.

    If the Fed chooses not to engage in QE this is as much an instance of economic central planning as if it chooses to do so.

  • Watch the below video of Jim Rogers to understand what happened regarding Japan’s lost decade. It was because of economic central planning that they have had a lost decade. We are following down the same road as Japan.

    http://www.reuters.com/article/video/idUSTRE6B66S320101207?videoId=167166175

    Allow me to further explain my statement that the presupposition that the economy can be centrally planned is a false. Central banking is a form of central planning.

    In this country the Fed is a semi/quasi governmental organization. It can best be described as a hybrid organization, semi-private and semi-governmental. It’s leader (the Chairman) is appointed by the President and confirmed by Congress. It’s highly regulated by Congress. The Chairman regularly briefs and responds to questions from Congress on monetary policy. The Sec. of Treasury works with the Fed like a hand does with a glove. The Chairman responds to pressures from the President, Sec. of Treasury and the Congress. Some Chairman respond to these pressures more than others. The current Fed Chairman does respond to these pressures.

    To be sure some Presidential Administrations have centrally planned more than others, i.e. F.D.R, etc. To say though that central economic planning in this country was limited solely to the First and Second World Wars is a false and erroneous statement. Anytime the Fed acts to interfere with the economy it is participating in central economic planning. Anytime our government in their fiscal policy gives bail-outs to failing banks or corporations, it is centrally planning. The boom and bust cycles are largely created by government interference in the market. If left to its own, downturns would be less servere and our economy would recover much quicker. End the Fed and bail-outs.

  • David,

    There is a difference between saying that we should get rid of the Fed and saying that the Fed should pursue one policy rather than another. Criticisms of the Fed’s QEII program are of the second type. They imply that the Fed should engage in one form of “central planning” rather than another. So even if the Fed ought to be abolished, that doesn’t tell you whether the QEII program is a good or bad idea.

    By analogy, government imposed price controls are a bad idea. But the fact that government imposed price controls are a bad idea doesn’t tell you whether a particular government imposed price is too low or too high. If the government had set the price of gas at $1.00 and then raised it to $1.50 it would make no sense to say that because you are opposed to price controls therefore the price should remain set at $1.00.

  • BTW, I just watched some of the Jim Rogers interview. Most of what he says there is just factually wrong. He says, for example, that devaluing (what he calls “debasing the currency”) has never worked. That’s not true. Partial devaluation of the currency is generally the way countries get out of serious financial crises.

  • David,

    “Central planning” refers to the erection of public agencies which allocate capital to specific projects in agriculture, extractive industry, construction, manufacturing, and tradable services in lieu of a reliance on the undirected processes of capital markets and private banking. ‘Twas done here only quite briefly during the World Wars.

    Central banking is not a form of ‘central planning’. The Federal Reserve is adjusting the interest rates it charges to and pays its clients and buying and selling securities to regulate the size of the monetary base. The minting and distribution of currency is an inherently public function, and an old one. Our last go ’round with a gold standard was economically ruinous, as was Argentina’s with the updated version thereof promoted by Hanke, et al.

  • http://www.federalreserve.gov/releases/h41/Current/

    Here is the most recent report of the Federal Reserve’s balance sheet. Tell us where Dr. Bernanke hid the ‘trillions in bailout for global corporations and foreign banks’.

  • I interrupt this argument to present a brief primer on how to hyperlink.

    Carry on.

  • David,

    I think it would be more productive if you would try to engage other people’s comments, rather than just posting a bunch of links.

The True Cost of TARP

Tuesday, November 30, AD 2010

What does the fact that, so it now seems, the TARP program will only end up costing taxpayers $25 billion tell us about the merits of the program? According to Jonathan Chait, this low price-tag makes the program “one of the most successful policy initiatives in American history.” This is a bad argument. If, as its proponents claim, TARP really did stave off a second Great Depression, then it would have been one of the most successful policy initiatives in American history even if it had cost taxpayers the full $700 billion. On the other hand, if TARP wasn’t necessary, then it likely wasn’t worth it even at the cost of only $100 per American.

Positive assessments of TARP seem to typically assume that the alternative to TARP would have been doing nothing (actually many opponents of TARP also tend to assume this). But this is not plausible. If Congress had decisively rejected TARP, it’s not like Bernanke was going to pull a Ray Patterson and book a cruise to Fiji. Instead we likely would have had an earlier bigger QE I. The overall economy would have ended up roughly in the same place, except that Wall Street would have borne a larger share of the pain.

This, at any rate, is the view of a number of iconoclastic economists on both the left and right.

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6 Responses to The True Cost of TARP

  • “This would have been a massive redistribution to the rest of society — their loss is our gain.”

    What is Baker talking about? How did Lehman’s bankruptcy benefit me?

    $25 billion more QE1 would’ve done close to nothing.

  • RR,

    That mystified me at first too. Baker is comparing TARP not to no action but to what he anticipates would have been the Fed’s alternative course absent TARP, which would have been more focused on the general economy rather than bailing out the banks.

  • While I recognize why the economists have silo-ed off the foreign policy implications of their policy choices, I think by doing so they hurt their credibility. Whether anyone cares to admit it or not, there were significant foreign policy implications with our choices. Perhaps they would have been worth it, but that argument hasn’t been put forward. Given the coordination between nations for the bailouts, it is certain that foreign policy was at play.

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  • Last report (September) I saw $2.6 billion in TARP preferred stock were in arrears/unpaid dividends. The amount of unpaid TARP dividends was $126 million.

    If these banks fail, the TARP will not get repaid (this is not permanent capital) its 5% (goes to 9% after five years) dividend, limited-life preferred stock back in cash. The regulators bent the regs to alllow this stuff in regulatory capital.

    TARP added capital to banks that were in distress. Bank Capital is not liquidity. It is solvency, and brakes on excess growth and untoward risk-taking.

    Likely, the money we the taxpayers gave GM, Chrysler and the UAW is gone . . .

  • That “$2.6 billion” above should have been $3.6 billion.

    “More Institutions Missing TARP Payments – As of September 30th, 154 institutions in the TARP Capital Purchase Program (CPP) have missed a dividend or interest payment. The total Treasury investment in institutions with non-current dividends and interest is $3.6B and the amount of non-current dividends and interest is now is $126 million.”

    Since the current banking crisis struck in 3Q2008, the FDIC has been named receiver for 314 failed insured banks and its losses are estimated at $75 billion. The FDIC recently lowered its estimate of total FDI insurance losses for the current crisis from $100 billion to $92 billion.

    Let’s put this in perspective. From 1934 to 2000, FDIC handled 2,811 bank failures and its losses were $44 billion, in non-inflation adjusted (I think) $$$.

    The RTC, beginning in 1989, handled 751 S&L failures at a cost to we the taxpayer of $82 billion. See FDIC 2000 Annual Report.

    The current great recession and banking crisis are NOT unprecedented.

    The geniuses never learn!

Apologia Pro Libertarianism Sua

Monday, November 22, AD 2010

There’s been a bit of discussion about the nature of libertarianism on the blog recently, and as the resident pseudo-libertarian, I thought I would re-state where I come down on the matter (this is based largely on an older post I did on the subject, which sadly is now lost in the cyber-ether).

To understand where I am coming from, one needs to make a distinction between political positions held as a matter of moral principle, and those held as a matter of prudence. Take the issue of torture. One might oppose the use of torture on the grounds that it’s not a good way to get information from suspects, or because by using torture on the enemy you risk retaliation by the enemy on your people, etc. Alternatively one might believe that torture is just immoral, and you should do it regardless of whether or not it is effective.

Call the first type of objection to torture “pragmatic” and the second “principled.” (A person might object to torture on both pragmatic and principled grounds, in which case the opposition would be principled, though buttressed by pragmatic considerations). Dividing the justifications for various political positions into principled or pragmatic can be sometimes tricky, but the basic idea is, I hope, intuitive enough.

A principled libertarian, as I use the term, is someone who holds libertarian political beliefs for principled reasons. Taxation is theft, my body, my business, etc. In my experience, when you say libertarian this is what people think of.

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17 Responses to Apologia Pro Libertarianism Sua

  • Excellent, the “will the bloody duck swim?” test – it is, really, the best. As it turns out, most conservative things do work, and most of the time a libertarian attitude towards government power is for the best…but, not all the time and not in all things.

  • BA,

    With your (very helpful) post as the context, how might you articulate the difference between “principled conservatism” and “pragmatic libertarianism”? Your post prompted me to realize that I tend to identify political positions with their fundamental principles, but clearly not everyone does so. Nonetheless… why not just call yourself a conservative?

  • Chris,

    What is “principled conservatism”?

  • BA,

    I’m thinking of conservatism as it’s been articulated by the likes of Kirk, Weaver, etc…. generally-limited intervention by the government, determined along the lines of subsidiarity, etc.

  • BA – answer Burgwald’s point/question first before responding to my random thoughts below.

    Chris’ comments relates to the tension between ideology vs. pragmatism. Was Reagan good (or great) because he was an ideologue or a pragmatist? I would argue the latter, as was other good Presidents, i.e. Nixon, Eisenhower, etc.

    More specifically related to your topic though and what came immediately to mind are the differences between the Mises Inst. and Cato Inst. The Mises Inst. (i.e. Murray Rothbard, Walter Block, etc.) & were/are the ideologues and the folks at Cato & Reason are pragmatists.

    Is Conservative American Political Party’s Two Pillars Strategy based upon the later? I would argue it is. Others would argue it’s not possible for a third party to gain sufficient support therefore it’s the former.

    http://www.thedailybell.com/1311/Nelson-Hultberg-on-Libertarian-Conservatism-and-His-New-Conservative-American-Political-Party.html

    The deeper or more fundamental question for me though is this – Which is true or what is true? Orthodoxy precedes Orthopraxis. Action based upon false or bad principles will eventually fail or not succeed. What are presuppositions and assumptions driving people’s thought and actions? If their world and life view is flawed, so will be their actions. I much prefer truth over error.

    Culturally it’s very American to focus on pragmatism. Focus on utility, focus on what works. This is the very essence of Scientology, but is Scientology true?

    I might add just because you can do it doesn’t mean it’s good.

    Anarchism is a completely different topic. It’s one that I will study more deeply. For the life of me at the moment I don’t see the reasonableness of it, but I want to read the best thinkers for anarchism before I make a judgment. Most Libertarians are probably minarchists, but is this the truest position to hold as a Libertarian? I don’t know…

  • Chris,

    I confess I haven’t found Kirk or Weaver to be very helpful in thinking about politics. Kirk is too impressionistic, and Weaver thinks that today’s problems are the result of philosophical errors made in the 12th century.

    In terms of why I stopped calling myself a conservative, there are a couple of factors. One is that I became increasingly uncomfortable with a lot of what was being espoused by American conservativism (e.g. defenses of torture, jingoism, xenophobia, etc.) Even where I agreed with the “conservative” position on an issue, it increasingly seemed as if I and your typical conservative doing so for very different reasons.

  • BA,

    I concur on your last point… I don’t think I’d be considered a “movement conservative”. But that’s because of my preference for identifying political labels according to principles rather than pragmatic approaches… I don’t think “movement conservatism” is being true to conservative principles, but I don’t eschew the label “conservative” with regard to myself because of it.

    But that’s me… as already noted, your post was helpful for me in that it alerted me to the fact that others might identify political labels differently.

  • Oh: I tend to think Weaver is right, by the way. 🙂

  • I don’t think “movement conservatism” is being true to conservative principles

    I took a similar line for a while, but eventually I had to conclude that the tendencies I was seeing weren’t deviations from “true” conservatism but were pretty much baked in the cake from the beginning. If anything it’s Kirk who was the oddball.

    Oh: I tend to think Weaver is right, by the way.

    A lot of people do. For myself, reading Occam pretty much robbed me of the ability to take Weaver seriously.

  • “Weaver thinks that today’s problems are the result of philosophical errors made in the 12th century.”

    To quote Wellington, anyone who would believe that would believe anything. Today’s problems have the same root cause as yesterday’s problems and tomorrow’s problems: original sin. Ideas Have Consequences is still a great book to read, as long as one doesn’t take it much more seriously than Das Kapital as a philosophical tract.

  • I’ll make a confession: I don’t know the specifics of Weaver’s arguments…. but perhaps he is right for the wrong reasons, because I certainly agree with the thesis that there is a faulty intellectual foundation to much of our contemporary discourse, a foundation which goes back to Ockham, and probably Scotus before him. Perhaps Weaver’s specific argument is weak, but he’s hardly alone in his conclusion: the Radical Orthodoxy school concurs, as do a number of the Communio scholars, along with a large chunk of Thomists.

    Benedict (a member of the Communio circle) certainly seems to indicate an agreement with his thesis, given the Regensberg address, in which his rightly notes the impact which late medieval theology & philosophy’s voluntarism has had on modernity.

    It’s clear that concepts might work themselves out and have “real-world” ramifications centuries or even millenia later… we see this positively with ancient greek philosophy and with the intellectual content of our own faith, but it’s just as possible for wrong ideas to work themselves out over similarly long periods of time.

  • Chris,

    I dated a Scotus scholar for a while after the Regensberg lecture. When I mentioned the controversy surrounding the speech she thought I was talking about the Scotus part. She hadn’t heard about the Islam rioting, but thought what Benedict said about Scotus was an unfair distortion.

  • BA,

    And…? 🙂

    I don’t doubt that the voluntarism that came forth from Scotus’ thought was far from his intention, but unintended consequences and all…

    I don’t expect a Scotus scholar to agree with this view, but given that it’s one held in common by various Augustinians, Bonaventurians and Thomists indicates that there’s *some* consensus among various schools regarding the ill fruit of Scotism on this point.

  • Is Ron Paul pragmatic?

    His voting record is one of the most ideological driven in the entire Congress, but he’s a Republican. I think he learned from his experience(s) when he ran as the third-party candidate (Libertarian Party) for President. Did he make a bigger impact by running as a Presidential candidate as a Republican? What kind of impact will he make as the Chairman of the sub-committee which oversees the Fed. Reserve? Will he run again for President, either as a Republican or third-party candidate, i.e. Conservative American Political Party? Many of the same folks who are supporting this new party and funding the below movie are huge Ron Paul supporters as well. Let us see.

    http://www.spoilerusa.org/

    Is the Free State Project pragmatic?
    http://freestateproject.org//

    Many argue that the Non-Aggression Axiom is the principle which drives Libertarian thinking. Is it true?

    Audio – The Lew Rockwell Show – 11. The Non-Aggression Axiom
    http://www.lewrockwell.com/lewrockwell-show/2008/08/04/11-the-non-aggression-axiom/

    The Non-Aggression Axiom of Libertarianism by Walter Block
    http://www.lewrockwell.com/block/block26.html

    Jonah Goldberg and the Libertarian Axiom on Non-Aggression by Walter Block
    http://www.lewrockwell.com/orig/block1.html

    Defending the Undefendable (a more detailed book on this axiom) by Walter Block
    http://www.amazon.com/Defending-Undefendable-Walter-Block/dp/1933550171/ref=sr_1_1?s=books&ie=UTF8&qid=1290609211&sr=1-1
    F.A. Hayek agreed, writing the author as follows: “Looking through Defending the Undefendable made me feel that I was once more exposed to the shock therapy by which, more than fifty years ago, the late Ludwig von Mises converted me to a consistent free market position. Some may find it too strong a medicine, but it will still do them good even if they hate it. A real understanding of economics demands that one disabuses oneself of many dear prejudices and illusions. Popular fallacies in economic frequently express themselves in unfounded prejudices against other occupations, and showing the falsity of these stereotypes you are doing a real services, although you will not make yourself more popular with the majority.”

  • One additional point – notice how Ron Paul is an active member of the Mises Inst. and how Lew Rockwell and the Mises Inst. are supporters of the Free-State Project.

  • Notice also how ISI who is a major promoter of Kirk’s and Weaver’s thought and books is now publishing the thought and books of Mises and Austrian economics.

  • David,

    In American politics pragmatic is typically used to describe a politician who does whatever is popular with the voters. That’s not what I mean. In other parts of the world being pragmatic means evaluating policies on their merits.

    I do not subscribe to the non-aggression axiom. Like many political principles it sounds nice in the abstract but when you look at the implications it is not clear why anyone would believe it.

Open Letter to Conservatives on Monetary Policy

Tuesday, November 16, AD 2010

By monetary economist Scott Sumner:

1. The Fed isn’t really trying to create inflation.

The Fed doesn’t directly control inflation; they influence total nominal spending, which is roughly what Keynesians call aggregate demand. Whether higher nominal spending results in higher inflation depends on a number of factors, such as whether the economy has a lot of underutilized resources. But it’s certainly true that for any given increase in NGDP, the Fed would prefer more RGDP growth and less inflation. Even after QE2, the Fed still expects less than 2% inflation for years to come. If the Fed had any marketing sense, they’d be telling the public they are trying to boost recovery by increasing national income, not increasing the cost of living. It would also have the virtue of being true.

2. “But doesn’t economic theory teach us that printing lots of money creates high inflation?”

In general that is true. But there are three important exceptions:

1. If the monetary injections are expected to be temporary, the inflationary effect is far smaller. The Japanese central bank did lots of QE in 2003, but pulled much of the money out in 2006 when deflation ended. It worked in preventing high inflation, indeed it may have worked too well.

2. If interest rates are near zero, the public demands more liquidity. The Fed can supply that liquidity with little impact on the price level.

3. If the Fed pays interest on reserves, then the quantity theory of money (more money means more inflation) doesn’t necessarily hold. They recently started paying interest on reserves, and that’s one reason why the big injections from 2008 didn’t have an inflationary impact. The Fed can adjust the rate as necessary, and indeed in my view a lower IOR would be more effective that QE2.

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25 Responses to Open Letter to Conservatives on Monetary Policy

  • NIA (Nov. 16, 2010) – Hyperinflation is Guaranteed if U.S. Stays on Current Path
    http://inflation.us/hyperinflationguaranteed.html

  • David,

    The NIA thinks that the median income in 1975 was $154,000 in today’s dollars. They are not a credible source of information.

  • I’m not learned enough to comment on QE2 but this is the first I’ve heard of setting monetary policy through NGDP futures contracts and I think it’s a brilliant idea. Don’t know if it would be wise but very interesting nonetheless.

  • The FRBoG doesn’t need to ask permission from me or any other yahoo, conservative unwashed idiot critic. They do whatever Prof Bernanke and his (egg head) Board of Governors think is appropriate.

    I’m with RR. I don’t remember other than monetary policy has to do with interest rates and money supply (with velocity changes somehow). Money supply is usually monkeyed with by reserve requirements and etc.

    Printing money has ever been inflationary. But, former BoG Vice Chairman Blinder and the current VC assure us that even though the FRBoG has never done one thing correct in 97 years, we can be assured that there will be no inflation after printing $600 billion in money: because there was no inflation after buying $1.25 trillion in MBS paper???

    Funny thing there neither was any improvement in employment and minimal upside in national output.

    I will copy the Prof’s comments into a WORD doc and can review after time passes.

    I have little faith in college profs when they play at monteary divination, or when they harrrass college kids.

  • Dave,

    The full letter and a list of signers can be found here. There are 23 signers, some of whom do not have any particular expertise when it comes to monetary policy (e.g. William Kristol).

    For comparison purposes, over 200 economists signed an open letter opposing Obama’s original stimulus package and a similarly large number signed an open letter opposing TARP. My view would be that the low number of signers is, if anything, an indication that the views expressed in the letter do not have widespread support even among conservative and libertarian leaning economists.

  • even though the FRBoG has never done one thing correct in 97 years,

    That’s absurd. Stop it.

    There are 23 signers, some of whom do not have any particular expertise when it comes to monetary policy

    Only a few are economists. To be fair, one can wager it was not extensively circulated beforehand. It has some heavy hitters: Michael Boskin, Charles Calomiris, and Douglas Holtz-Eakin.

  • OK, Art Deco: Name three “things” the FRBoG got right since 1913. Clearing checks and balancing the books don’t count.

  • Even Greenspan is questioning the current policy of the Fed…

    Greenspan Says U.S. Playing `Dangerous Game’ on Stimulus
    http://www.bloomberg.com/video/63579250/

  • T. Shaw, the Board of Governors and the Open Market Committee of the Federal Reserve System have dozens of meetings each year to make consequential decisions on the interest rates they charge, on the quantum of the monetary base, and on regulatory matters within their book. You are telling me you have analyzed every single decision over a period of 97 years and they were in error every single time. Such a statement is nonsensical.

    The successful stabilization of prices in 1951 and 1981-82 should count as successful initiatives, as would be containing panic at the time of the 1987 market crash.

  • David, Greenspan’s reference is to ‘the stimulus’, i.e. fiscal policy.

  • Art Deco – That’s an important point. Thanks.

    I do have some questions though… Where did (or does) the money for whatever stimulus come from? Didn’t they have to print the money to do it/them? They didn’t raise our taxes or sell enough additional bonds to give them out. Fiscal policy is connected to Monetary policy.

  • Art,

    Shortly, we will see how this scheme works. The $1.25 trillion MBS buys did not raise output, AD, or employment. There are other ‘things’ holding down the economy. To run the inflation machine to solve a problem that is not monetary . . .

    What time frame will we use?

    The “cures” you cite were worse than the diseases, which could have been avoided in the first place.

    I don’t know about 1951. I was a year old. I remember 1987, what a hoot. The Fed has a lot to do with equity markets?

    I lived and worked through the 1980 -1981 Fed moves (Prime Rate 19%, 30 year mortgage rate 20%). That was like economic cancer treatment: radical radiation and chemo-therapy simultaneously administered. If you think that was a good, there is no reasoning with you.

    If you think keeping the fed funds rate at 1% in the 2000’s was a success . . . Ask the shareholders of IndyMac Bank, and $80 billion in FDIC insurance losses . . .

  • Dave,

    The fiscal stimulus was, I believe, financed by borrowing, not by printing the money for it.

    There are arguments in favor of abolishing the Federal Reserve and/or returning to a gold standard. For the time being, however, we do have a Fed and a fiat currency, so the question is not whether the Fed should print money but how much it should print. Market indicators are that it is not printing enough to keep up with demand. Hence the need for more monetary stimulus.

  • T. Shaw,

    The 1980-81 recession was harsh. Yet given that the Fed’s alternative was to continue with high inflation, it seems that the Fed made the right call there. Do you really disagree with that?

  • BA: No.

    But, why was the USA given such an alternative?

    Seems the FRB could not protect USA . . .

    Who’d’a thunk! 12% inflation and 10% unemployment! The Misery Index (calculated by adding inflation and unemployment) rose to 21.9% in 1980 (today it is 10.2%).

    What economic model covers that?

    Here are other 20th century Fed and big government achievements:

    A Perfect Storm of D.C. policy caused the Great Depression:
    In the 1930s, the Smoot-Hawley Tariff Act caused a collapse in global trade.
    The Fed allowed the money supply to shrink by one-third.
    Herbert Hoover raised taxes.

    In the 1960’s – 80’s Washington tried again.
    Great Society welfare and health-care programs.
    Wage and price controls.
    Inflationary Fed policy
    70% marginal tax rates, 50% capital-gains tax rates.
    Highly regulated energy, airline, banking and trucking industries created severe problems.

    Seems to me the Fed has the anti-Midas touch. The powers that be keep placing blind faith therein.

  • Bovine Scatology. Open letter to ‘conservatives’ from liberals pretending to be conservative. Come on! Who is buying this Bovine Scatology?

    Trying to determine how much and in which way the Fed should do anything is akin to trying to influence Hitler as to how many Jews and Catholics should be killed and in what manner. The Federal Reserve Bank of New York makes all the decisions, Bernanke is just the ‘politically appointed’ face and the BOG is only for show. Congress, the President and the people have no say in this whatsoever.

    The Fed is nothing more than usury. It is immoral, it is unethical, it has NEVER accomplished any of its stated goals and has been relatively effective at accomplishing its intended goals: Control the government through the purse by addicting the politcos to debt borrowing (spending) and then offering a solution to inflate the money supply in order to ‘reduce’ the debt. It is a wealth transfer from all the people to the trans-national financiers and owners of the monster from Jekyll Island and a transfer of sovereign power from the people to the federal (national) government and eventually to a global scheme of corporatist-totalitarianism (or some variation of the Hegelian (evil) synthesis of Capitalism/Communism)

    This is unAmerican, it must be stopped, money weight must be set by Congress. This is anti-Catholic, it must be stopped, usury is a grave evil and along with murder (especially abortion, infanticide, euthanasia) and Sodomy (acceptance of pederasty, homosexualist behavior, porn, masturbation, etc.) are the principle reasons this country is in trouble. Those evils are related and the instigators and perpetrators of these evils are all of a piece.

    You cannot consider yourself an orthodox Catholic and be in support of the Federal Reserve scheme. Ignorance is not an excuse. It is time to end this thing – not abruptly, but a definite transition is necessary and the power of the purse belongs to the Congress in the people’s House and what should be the States’ Senate (repeal the 17th).

    Expect a double Paul pincer attack against this beast in January, watch the authentic conservatives support them and watch the Regressives (‘progressives’, liberals, Democrats and so-called Republicans with absolutist stripes) flail. The Fed is on its heels, it cannot even control what it started, the house of cards is crumbling and the beast is frightened by the people who have learned what it really is. It will NOT live to see its 100 birthday.

  • His comments about the future of the U.S. and China are even more interesting… Glenn Beck’s hair must be on fire.

    George Soros says conditions “pretty perfect” for gold
    http://www.reuters.com/article/idUSTRE6AF4BV20101116

  • David, your referent is to an article which prints a piece of correspondence. The letter-writer is under the false impression that the consumer price index excludes food and fuel prices. It does no such thing. The Bureau of Labor Statistics does produce an additional price index referred to as ‘core inflation’ which excludes food and fuel prices because these are volatile. The Consumer Price Index itself includes food and fuel prices (and why we should regard the Bureau of Labor Statistics as producing unreliable measures and this man eyeballing the price of Raisin Bran at his supermarket as a reliable measure I cannot fathom).

  • What economic model covers that?

    Milton Friedman’s conception of a family of Phillips Curves, one for each level of expected inflation.

    Here are other 20th century Fed and big government achievements:

    A Perfect Storm of D.C. policy caused the Great Depression:
    In the 1930s, the Smoot-Hawley Tariff Act caused a collapse in global trade.

    The United States in 1929 exported only about 5% of its domestic product (and generally imported less than that). It was not well-integrated into international markets. Only those economies notably dependent on the American market would have been injured by first-order effects of that tariff: that of Canada and perhaps some of the territories of the Caribbean Basin and a scatter of others.

    It should also be noted that the aftershocks of the financial crisis in the Fall of 2008 included an implosion in world trade as severe as that which occurred in 1929-30, without tariff legislation.

    Excises on imports are hardly an example of ‘big government’, unless you consider the era extending from 1789 to 1916, when little use was made of direct taxes or common excises, to be an era of ‘big government’.

    The Fed allowed the money supply to shrink by one-third.

    That is not an example of an excessively busy central government but of an excessively passive one. The Federal Reserve had concerns about the effects of open market operations in the context of the currency peg, so did not attempt them until 1932. The currency peg was there by statute. It was commonly expected that the United States would follow Britain off the gold standard in Sept. 1931. It failed to do so and undertook actions to stem an outflow of gold, so while Britain began an economic recovering, the United States experienced the most harrowing 10 month period in the nation’s economic history. You all need to get your story straight. The Federal Reserve’s maligned program has as its object an expansion in the monetary base to meet the demand for liquidity. This is precisely what the (constrained) Federal Reserve failed to do in the period running from the Fall of 1929 to the Spring of 1932.

    Herbert Hoover raised taxes.

    Congress raised taxes at the President’s request, because the fall in revenue co-incident with the Depression had generated a (contextually) large defecit. The practice of balanced budgets was the orthodoxy of the time, and we can now see the salutary aspects of that orthodoxy, even if it was adhered to in circumstances where it was injurious.

    In the 1960’s – 80’s Washington tried again.
    Great Society welfare and health-care programs.
    Wage and price controls.
    Inflationary Fed policy
    70% marginal tax rates, 50% capital-gains tax rates.

    Highly regulated energy, airline, banking and trucking industries created severe problems.

    This stew of complaints has some validity, but it is perfectly irrelevant to a discussion of monetary policy in 1931 or today. BTW, high marginal tax rates were not a Great Society initiative, nor was the mercantile regulation of the transportation sector or banking. The former was leftover from the 2d World War and the latter from the Depression. I actually rather miss Glass-Steagall, all things considered.

    Seems to me the Fed has the anti-Midas touch. The powers that be keep placing blind faith therein.

  • The last sentence is a quotation from T. Shaw. It is wrong.

  • BI – BOB RUBIN: “US In Terribly Dangerous Territory,” Bond Market May Be Headed For “Implosion”
    http://www.businessinsider.com/rubin-bond-market-implosion-2010-11

    Warning of the risk of an “implosion” in the bond market, former Treasury Secretary Robert Rubin says the soaring federal budget deficit and the Fed’s quantitative easing are putting the U.S. in “terribly dangerous territory.”

    Speaking at an event at The Pierre Hotel in New York City honoring Sen. Kent Conrad (D-N.D.), Rubin joined the growing number of current and former officials (foreign and domestic) to criticize QE2. The Fed’s plan to buy $600 billion of Treasuries “has a lot of risk,” he said, calling the international reaction “horrendous”…

    Bloomberg – Dollar to Become World’s `Weakest Currency,’ JPMorgan Says
    http://www.bloomberg.com/news/2010-11-18/dollar-to-become-world-s-weakest-currency-drop-to-75-yen-jpmorgan-says.html

  • Reuters – Bernanke Hits Back at Fed Critics, Points at China
    http://www.cnbc.com/id/40264759/

Moralism and Monetary Policy

Monday, November 15, AD 2010

Last week I mentioned in the comments to this post that I think most political and financial problems are fundamentally technical rather than moral and cultural in nature. Several people took exception to this idea, so I figured I should probably try to elaborate a bit on what I meant.

Start with a historical example. During the 14th century, European society was rent asunder by the Black Death. Between a third and half of people died, and the resulting turmoil caused serious political, economic, and social upheavals. As Wikipedia notes, many governments “instituted measures that prohibited exports of foodstuffs, condemned black market speculators, set price controls on grain and outlawed large-scale fishing,” none of which stopped the spread of the disease. Given the vast amount of suffering, it’s only natural that many people concluded that the causes of the Black Death were fundamentally moral or cultural in nature. Many people argued that human sinfulness, greed, pride, etc., had caused God to turn his back on Western society, whereas others sought to blame the outbreak on a specific group, such as the Jews. Today, of course, most people recognize that the cause of the plague was less a matter of morality than of hygiene. But if you were to tell an average 14th century European that the plague was being caused by fleas from rats, he would likely think you were naively trivializing the issue.

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3 Responses to Moralism and Monetary Policy

  • Ironically, F.D. Roosevelt’s changes in monetary policy and in financial regulation were very effective.

    The difficulty with your argument is that it is dead wrong with regard to this particular problem. The current crisis has had sources and motors which derive from aspects of the moral and ethical life. Those of you schooled in law and philosophy can parse it out, but this layman will call it a deficit of conscientiousness on the part of both households and institutions and a deficit of public spirit on the part of politicians and some commentators.

    1. The decay in the capacity for deferral of gratification, manifest in the secular increase in per capita debt loads by households.

    2. The decline in underwriting standards by those originating mortgages (I’ve a friend in the banking business in Rochester; his disgust over the phenomenon of subprime lending, which his bank eschewed, was in part a moral judgment about the practice).

    3. Lack of due diligence. The characters in the AIG Financial Products group had, up to 2005, no clue about the composition of the mortgage pools on which they were writing credit default swaps.

    4. Inertia. Asked to explain some of his odd behavior in 2008 and 2009, Henry Paulson: Congress does flat nothing about anything unless their is a crisis (and yet the institution is consumed by busyness as they play parliamentary games with each other).

    5. Absence of historical sense: Charles Calomiris has made this point. Banking and financial crises are not all that unusual and there are established protocols for addressing them. His complaint was that Paulson and Geithner (and Bernanke?) threw this out the window and commenced madly improvising.

    6. Cronyism. The eschewal of certain policy tools (e.g. debt for equity swaps) and the character of the eventual piece of financial regulation does not have too many plausible explanations bar the reflexive subordination of public interest to private interest by Barney Frank and others. Ditto the very existence of Fannie Mae and Freddie Mac.

    7. Artifice. The Democratic Party given the chance made use of circumstances to push pork projects and enact a contextually gratuitous piece of legislation on medical insurance in lieu of a serious amendment to financial architecture.

    8. Sheer carelessness. So, just who owns that promissory note?

  • Excellent, AD.

    Many factors contributed. The proportion of home ownership rose from 64% to 69% in 2005. HUD, under new NY Gov Cuomo, ordered FNMA/FHLMC to do 50% of their mortgage purchases in “low-to-moderate” income citizens.

    The amount of money that FNM/FHLMC ran unto the housing market caused a price bubble.

    Banks saw comparable sale prices rising and bought into the maxim RE prices never decline.

    Loans were made solely on nonstabilized comp sales appraisals. The other four factors in credit underwriting were ignored.

    Many other factors were invoilved. But, the players all beleived that a new paradygm was at play and things had changed forever. NOT!

    That hapens over and over and they never learn.

  • I suppose any crisis can ultimately be blamed on greed and ignorance. In that case, human nature, i.e., self-interest and information asymmetry, is part of the technical equation and may be remedied with technical solutions.

Caritas in Veritate 25, By the Numbers

Monday, July 26, AD 2010

My co-blogger Tim recently highlighted the following statement from Pope Benedict’s latest social encyclical, Caritas in Veritate:

The global market has stimulated first and foremost, on the part of rich countries, a search for areas in which to outsource production at low cost with a view to reducing the prices of many goods, increasing purchasing power and thus accelerating the rate of development in terms of greater availability of consumer goods for the domestic market. Consequently, the market has prompted new forms of competition between States as they seek to attract foreign businesses to set up production centres, by means of a variety of instruments, including favourable fiscal regimes and deregulation of the labour market. These processes have led to a downsizing of social security systems as the price to be paid for seeking greater competitive advantage in the global market, with consequent grave danger for the rights of workers, for fundamental human rights and for the solidarity associated with the traditional forms of the social State. Systems of social security can lose the capacity to carry out their task, both in emerging countries and in those that were among the earliest to develop, as well as in poor countries. Here budgetary policies, with cuts in social spending often made under pressure from international financial institutions, can leave citizens powerless in the face of old and new risks; such powerlessness is increased by the lack of effective protection on the part of workers’ associations.

Now in this passage, the Pope makes a number of factual and causal claims. First, he claims that the global market has led countries to “attempt to attract foreign businesses” by adopting “favourable fiscal regimes and deregulation of the labour market.” Second, the Pope claims that these reforms (i.e. adopting “favourable fiscal regimes and deregulation of the labour market”) have led to “a downsizing of social security systems” and “cuts in social spending.”

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  • I believe in one social encyclical by JP II (can’t recall which one) it was noted that social teaching was subject to correction as historical, sociological etc.understanding advanced. Perhaps this is a case where evolving economic understanding would correct prudential assessments.

  • That’s a great post. It needs to be stressed really forcefully that the Pope’s comments in an encyclical like Caritas vary in nature quite dramatically, and many of his statements are simply the opinion of a wise but limited individual.

    Two other aspects of the document struck me as showing unusually clearly that the document drew from distinct, and to some extent opposed, sources. (1) On the one hand, the Pope suggests that globalization and its progeny have the danger of suppressing the distinct characters of separate peoples. On the other, he seems to laud the ability of people, labor, goods, and ideas to move freely around and mix, to the potential betterment of all. Well, you can’t have the latter without the former, so which is it?

    (2) In a like vein, the Pope makes it entirely clear that stronger world governance is needed, “with teeth”, and that the UN should take steps in dealing with the dramatic poverty caused by the 2008 crisis in short order – months to a year timeframe – steps that would in fact require such “teeth” as the UN does not possess. On the other hand, the Pope makes it clear that any world organization for governing must be organized with subsidiarity as a founding principle. But the UN, and especially the UN aspects that are the strongest in terms of “teeth”, exhibit nothing whatsoever in the nature of subsidiarity, and indeed the ruling class of bureaucrats in NY and Geneva, (and in Brussels and the Hague) are quite adamantly opposed to subsidiarity whenever they come up against it. So, again, which is it?

  • Pingback: Caritas in Veritate 25, By the Numbers II « The American Catholic

On Not Having Sex At Harvard

Sunday, July 25, AD 2010

From the New York Times:

There was a time when not having sex consumed a very small part of Janie Fredell’s life, but that, of course, was back in Colorado Springs. It seemed to Fredell that almost no one had sex in Colorado Springs. Her hometown was extremely conservative, and as a good Catholic girl, she was annoyed by all the fundamentalist Christians who would get in her face and demand, as she put it to me recently, “You have to think all of these things that we think.” They seemed not to know that she thought many of those things already. At her public high school, everyone, “literally everyone,” wore chastity rings, Fredell recalled, but she thought the practice ridiculous. Why was it necessary, she wondered, to signify you’re not doing something that nobody is doing?

And then Fredell arrived at Harvard.

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  • We need more Janie Fredells and Mary Anne Marks

  • We need to pray for them and the many others that have to live in a sex-saturated society such as ours.

  • Unforetunately one night about a year ago, I stopped at a serious tv documentary which was about a Catholic author who found extensive non marital sexual activity at Catholic colleges which went on to note then the gradual regrets of the females but with this caveat…that the females doing this outnumbered the males doing so but not by much.

  • Something which seems to be downplayed in the article is the belated realization that the annoying evangelicals of the first paragraph had a point.

    I think that both young evangelicals and young Catholics are young; they have things to learn about life. The evangelicals in this case seem to have not learned how to read Janie Fredell so as to speak with a potential ally in a winsome way.

    But Janie herself seems to have misunderstood her circumstances; it took immersion in Harvard to wake her up. Little or no sex amongst unmarried teens in Colorado Springs? I doubt that. The evangelical chastity ring culture may have seemed odd to her, but it grew up as a response to something. It was a rallying cry for Jesus, but also against a threat.

    The whole secular world is engaged in undermining the sexual virtue of the young so as to preemptively undermine their relationship with God before it can grow into something world-changing. From the WWJD shirts to the multicolored bead-bracelets to the chastity rings, evangelical expressions of counter-cultural fervor are like the redness and puffiness of a histamine reaction. They may border on kitch, but they are the signs of an immune system rising up to fight an invader.

    Miss Fredell is a Catholic; I hope however that now that she’s seen the infection up close, she’ll give her evangelical brothers and sisters their due props.

  • Catholics who insist that evangelicals have had a baneful effect on us (as evidenced in the recent sparring with Vox Nova) tend to deny the importance of chastity as a criterion of Christian fidelity. In so doing, they deny the importance of what the Church teaches is the very groundwork of a just society: strong family life. It may take people like Miss Fredell, educated in an elitist environment but respectful of the position of the evangelicals, to help our co-religionists to see the light here.

  • I’m not sure delaying sex until one is 30 is “pro-family.” I take that back, 30 is when they want folks to get married. Abstinance programs tend to delay sex only until 18-21. Certainly that is better than 14 or 16, but that is more a public health issue. If stop gazing at evangelicals long enough, we’ll see that they aren’t retaining their youth either.

    The time between when one is capable of producing a child and when one gets married has traditionally been called adolescence. Our model has now stretched that well past the early twenties. Having a large adolescent culture is not pro-family.

  • MZ, I do have to agree with you – adolescence has been unnaturally extended well beyond its due course. Largely due to materialism I would wager.

  • I take that back, 30 is when they want folks to get married.

    Who?

  • I’m unclear what relation, if any, MZ’s comment is meant to have with the article quoted.

Progressives Are Not Cynical Enough About Business

Friday, July 16, AD 2010

One thing my study of economics has taught me is that businesses will tend to act in whatever way they think will bring them the most profit. There may be rare exceptions, and of course businessmen often have mixed motives. But the overall tendency in this direction is very strong.

My guess is that if you surveyed people, many more self-described progressives would say that they agreed with the statement than self-described conservatives. Indeed, progressives often criticize conservatives and libertarians for being insufficiently attuned to the rapacious self-interest motivating businessmen.

Yet oddly enough, it seems to me that one of the main problems with progressive thought is that they don’t take the idea that businesses act to maximize profit seriously enough. For a group that claims to have a low opinion of businessmen, progressives have a strange habit of advocating policies that will only work on the supposition that businesses won’t act to maximize profit, and then react with shock when they proceed to do so.

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  • ” If progressives would only be more consistent in their cynicism, their policy prescriptions might improve.”

    Progressives who become more consistent in their cynicism become Marxists.

  • It is not a question of progressive’s being cynical enough, more like being clueless enough of how economic life actually works. Government always trumps private, Federal vs. local. They are extremely ideologically consistent in this. The law of unintended consequences is automatically ignored in staying true to this worldview.

  • Progressives who become more consistent in their cynicism become Marxists.

    A more consistent cynicism might lead progressives to become Marxists, or it might make them into libertarians.

  • Whether it leads to marxism or libertarianism is unimportant. The Progressive movement is utopian, denies original sin, and Jesus Christ. It was condemned prior to Vatican II and Catholics can not be Progressives. Thought you’d like to know.

  • @Tim McCarthy
    What you’re saying isn’t completely right. The Vatican always argues for a “balance” between pure capitalism and socialistic capitalism. I think, for instance, that they would’ve agreed with the raise of the minimum wage; even though some companies are now apperently cutting working hours, a large share of companies simply can’t so their poorest employees are earning more.
    Sure, the idea that we can create a utopia with socialism is obviously not realistic and not in line with Catholic teachings, but I certaintly believe that a Catholic or christian government or business must protect their poorest employees or citizens. We can obviously not stop sin but caring for our brothers and sister is most definitely effective. Again I’m not saying people should adopt socialism, just that there should be some social elements in capitalism.
    See for instance Rerum Novarum and the social teachings of the church.
    Maybe you know all this and I just understood you wrong, I don’t mean to be patronizing (or socialist BTW), but at least others should know this.

  • Richard, you’re right on track. And we can all thank you for reminding us here of what the Church actually has to say about the matter as opposed to letting people like Glenn Beck define our terms for us. Actually, I don’t feel any strong desire to rehabilitate the term Progressive. I do want to point out, though, that when liberals or progressives or Democrats or whatever you want to call them decry the abuses of big business, it is actually an opportunity for conservative enablers of big business (through irresponsible deregulation) to wake up from THEIR doey eyed naivete.

  • Mark,

    Here’s a list of the irresponsible (bank) deregulation since 1864.

    1. National Bank Act of 1864 (Chapter 106, 13 STAT. 99). Established a national banking system and the chartering of national banks.
    2. Federal Reserve Act of 1913 (P.L. 63-43, 38 STAT. 251, 12 USC 221). Established the Federal Reserve System as the central banking system of the U.S.
    3. To Amend the National Banking Laws and the Federal Reserve Act (P.L. 69-639, 44 STAT. 1224). The McFadden Act of 1927. Prohibited interstate banking.
    4. Banking Act of 1933 (P.L. 73-66, 48 STAT. 162).
    Glass-Steagall Act. Established the FDIC as a temporary agency. Separated commercial banking from investment banking.
    5. Banking Act of 1935 (P.L. 74-305, 49 STAT. 684).
    Established the FDIC as a permanent agency of the government.
    6. Federal Deposit Insurance Act of 1950 (P.L. 81-797, 64 STAT. 873). Revised and consolidated earlier FDIC legislation into one Act.
    7. Bank Holding Company Act of 1956 (P.L. 84-511, 70 STAT. 133). Required Federal Reserve Board approval for the establishment of a bank holding company.
    8. International Banking Act of 1978 (P.L. 95-369, 92 STAT. 607). Foreign banks in the federal regulatory framework. Deposit insurance for branches of foreign banks engaged in retail deposit taking in the U.S.
    9. Financial Institutions Regulatory and Interest Rate Control Act of 1978 (P.L. 95-630, 92 STAT. 3641). FIRIRCA. Created the Federal Financial Institutions Examination Council. Established limits and reporting requirements for bank insider transactions. Electronic fund transfers.
    10. Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221, 94 STAT. 132). Established “NOW Accounts.” Began the phase-out of interest rate ceilings on deposits. Granted new powers to thrift institutions. Raised the deposit insurance ceiling to $100,000.
    11. Depository Institutions Act of 1982 (P.L. 97-320, 96 STAT. 1469). Garn-St Germain. Expanded FDIC powers to assist troubled banks. Net Worth Certificate program. Expanded the powers of thrift institutions.
    12. Competitive Equality Banking Act of 1987 (P.L. 100-86, 101 STAT. 552). CEBA. Expedited funds availability. Recapitalized the Federal Savings & Loan Insurance Company (FSLIC). Expanded FDIC authority for open bank assistance transactions, including bridge banks.
    13. Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (P.L. 101-73, 103 STAT. 183). FIRREA – restore public confidence in the savings and loan industry. Abolished the Federal Savings & Loan Insurance Corporation (FSLIC), and the FDIC was given the responsibility of insuring the deposits of thrift institutions in its place. FDIC insurance fund created to cover thrifts was named the Savings Association Insurance Fund (SAIF), while the fund covering banks was called the Bank Insurance Fund (BIF). Abolished the Federal Home Loan Bank Board. Two new agencies, the Federal Housing Finance Board (FHFB) and the Office of Thrift Supervision (OTS), were created to replace it. FIRREA created RTC as a temporary agency of the government. The RTC was given the responsibility of managing and disposing of the assets of failed institutions.
    14. Crime Control Act of 1990 (P.L. 101-647, 104 STAT. 4789). Title XXV of the Crime Control Act, known as the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act of 1990, greatly expanded the authority of Federal regulators to combat financial fraud.
    15. Federal Deposit Insurance Corporation Improvement Act of 1991 (P.L. 102-242, 105 STAT. 2236). FDICIA greatly increased the powers and authority of the FDIC. Major provisions recapitalized the Bank Insurance Fund and allowed the FDIC to strengthen the fund by borrowing from the Treasury. The act mandated a least-cost resolution method and prompt resolution approach to problem and failing banks and ordered the creation of a risk-based deposit insurance assessment scheme. Brokered deposits were restricted, as were the non-bank activities of insured state banks. FDICIA created new supervisory and regulatory examination standards and put forth new capital requirements for banks.
    16. Housing and Community Development Act of 1992 (P.L. 102-550, 106 STAT. 3672). Established regulatory structure for government-sponsored enterprises (GSEs), combated money laundering, and provided regulatory relief to financial institutions.
    17. RTC Completion Act (P.L. 103-204, 107 STAT. 2369.
    18. Riegle Community Development and Regulatory Improvement Act of 1994 (P.L. 103-325, 108 STAT. 2160). Established a Community Development Financial Institutions Fund, a wholly owned government corporation that would provide financial and technical assistance to CDFIs.
    19. Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (P.L. 103-328, 108 STAT. 2338). Permits adequately capitalized and managed bank holding companies to acquire banks in any.
    20. Economic Growth and Regulatory Paperwork Reduction Act of 1996 (P.L. 104-208, 110 STAT. 3009
    21. Gramm-Leach-Bliley Act of 1999 (P.L. 106-102, 113 STAT 1338) Repeals the Glass Steagall Act of 1933. Allows national banks to underwrite municipal bonds. .
    22. International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001* (P.L. 107-56) The law requires financial institutions to establish anti-money laundering programs and imposes various standards on money-transmitting businesses.
    23. Sarbanes-Oxley Act of 2002 (P.L. 107-204) Sarbanes-Oxley establishes the Public Company Oversight Board to regulate public accounting firms that audit publicly traded companies. It prohibits such firms from providing other services to such companies along with the audit. It requires that CEOs and CFOs certify the annual and quarterly reports of publicly traded companies. The Act authorizes, and in some cases requires, that the Securities and Exchange Commission (SEC) issue rules governing audits.
    24. Fair and Accurate Credit Transactions Act of 2003* (P.L. 108-159)
    25. Dodd/Frank – In 2,300 pages the culmination of all that preceeded.

  • My opinion of liberals/progressives tells they think businesses and Republicans will to act in whatever manner necessary to make Obama look bad.

    For example, today the racists are selling off the NYSE just to cause people to think that Obama’s socialist agenda is not salutary. The villains!

  • I think you ought to read the documents. It still stands that Progressivism is utopian and as such denies original sin and by extension Jesus Christ. Their was never any teaching allowing socialistic capitalism. What is that ? Socialism and Communism and Progressivism are condemned. Subsidiarity is what is approved. The means of production owned by working men is approved. Re-distribution of wealth is condemned. Moreover what is socialistic capitalism ? Do you mean Distributism written about by Chesterton and Belloc ? Glenn Beck has nothing to do with me, I was taught by the Church prior to Vatican II in the 1950’s. The Church can not change it is until the end of this age, and no lib modernist influence has any place in the Church.

  • Humanistic ideal: “Man is the measure of all things and that our job is to make life worth living.”

    “But it is not necessary here to argue whether the other-worldly or the humanistic ideal is ‘higher.’ The point is that they are incompatible. One must choose between God and Man, and all ‘radicals’ and ‘progressives’ from the mildest liberal . . . have in effect chosen Man.”

    Orwell: “Reflections on Gandhi”

  • @Tim McCarthy Doesn’t subsidiarity imply a kind of involvement of the government in for instance health care? Helping society organise systems like that?

  • The most important goal of business is survival. If a business does not survive it can do no good or anything. The main goal of a progressive politician is to get elected; just like his or her conservative counterpart. Ergo, he or she will do or say whatever it takes to stay in office. Why state the obvious. Everybody knows that business people or politicians or bureaucrats driven by fear or lust for power or greed make poor choices that harm themselves and many others and then try to cover their tracks. On the other hand great leaders driven by Faith, Hope and Love make inspired choices that enrich themselves and the world at large. Let’s quit bemoaning human weakness and spread the One True Faith that will once again make a positive difference.

  • @ Richard. No it doesn’t. It means the decision should be taken as close to the action as possible. No Federal nothing unless it can not be resolved at the lowest level. For example parents decide what their children are taught not the Federal Government. But to the contrary the Federal Government should maintain interstate roads. They should regulate interstate trade, getting rid of obstacles for the free flow of commerce. There is no reason not that by applying subsidiarity and free market principles we couldn’t have better cheaper health insurance than what is currently going on. I’m not for turning back the clock, but if we took a look at how the laws were back then and adapted them to now we would be better off. On the one hand we have the party of death, and on the other the zionist neo-cons, and to paraphrase Fr. Malachi Martin when asked who he’d vote for Kerry or Bush he said he intended to be in St. Pats in NYC praying God would deliver us from both of those evils. Progressives are the enemies of the Church.
    tim

  • Without the assistance of government, business is shackled by the consumer. If the consumer is vicious, the business will be vicious. If the consumer is virtuous, the business will be virtuous.

    Government has a role; however, a vicious electorate will elect a vicious government and business will secure its authority through the power of the gun. Then there is no check on evil.

    Progressives, especially well-intentioned progressives are dangerous and destructive.

    Capitalists, as capitalism has come to be practiced are corporatists. They secure profits and eliminate competition with the power of the guns of government.

    To think that modern capitalists and progressives are different is simply foolish – they are exactly the same. Big Business and State Socialism are very much alike, especially Big Business – Chesterton.

    A government of virtuous men will curtail our disordered appetites and leave the natural free market to serve. No one goes into business, in a genuinely free market, unless they think they have a way to serve others and their profit is the measure of the degree of success they achieve in serving others.

    In a progressive corporatist capitalist construct only those with the lust for power will go into business and should anyone else manage to get in, they will be crushed by the corporate government.

    Debating capitalism, socialism, progressivism, etc. in the current paradigm is a fools errand. The terms we are using are incorrect, the intentions are masked and the idea of Christian justice doesn’t enter into the equation.

    Progressive aren’t cynical about business. Progressives are very much in favor of business provided they control consumer choices – no happy meals with toys, plenty of prescription drugs with deadly side effect, no guns in the hands of the common man, the right to murder a human being simply because of their current location – inside the womb or in the nursing home. They also want to control the businesses – no free market in insurance, managed pools of mandatory insurance instead, no parochial schools, plenty of government indoctrination centers.

    This is the stuff of a ‘scientific dictatorship’, one in which the slaves enjoy their servitude. It is a technological feudal system – we are the serfs and the progressives are the lords. The first thing our lords must do is eliminate the only Lord we should have – His Name is Jesus Christ.

    No King but Jesus Christ for me.

  • Psalm 146:3, “Put not your faith in princes . . . “

  • Someone help me out here – is there a reason the author of the article is not posted with the article – I have never seen a blog that doesn’t list the author. It is EXTREMELY annoying an unprofessional.

  • Jim, the author shows at the bottom of each post on the main page. The individual pages don’t for some reason (and I agree it’s unfortunate, but it’s not that big of a deal once you know where to look). Blackadder was the author of this post.

  • “It is EXTREMELY annoying an unprofessional.”

    Professional? Jim, we are just a rag-tag bunch of unpaid volunteers! 🙂

    As RL said you can see the authors on the main page for each post before clicking on the post. Alternatively, on the main page clicking on a contributor’s name will bring up all the posts of the contributor clicked on.

  • That businesses optimize is a useful assumption in constructing ideal types. I think you will find in practice that businesses satisfice rather than optimize.

    In the case of wage and hour laws, rules on the terms on consumer credit, and the regime in health care finance, public policy imposed costs. Parties to economic transactions make adjustments which distribute the costs between workers, proprietors, and customers. Some of the politicos who imposed those costs did so with the assumption that proprietors would eat all the new costs.

    It may be that these pols are insufficiently cynical. It may also be that they are ignorant or have not come to the realization that other people have their own agendas and their own fish to fry and are not merely characters in Henry Waxman’s doll house. I come from Upstate New York. We have twelve members of Congress. Perhaps four have some familiarity with business or economics from the occupations they have followed or from academic study. Ignorant would seem likely. The extent of narcissism would be harder to determine.

  • After reading this discussion I’m baffled by the republican party. They seem to get the vote of most serious christians (and rightly so, as they are against abortion), but they often seem very unchristian. Seen from Europe I get the impression that they are often a little xenophobic and very warlike. Also the ties politicians in the United States often have with the business world seems very unhealthy for a democracy.
    Are these impressions just wrong? BTW the presidential candidates are obviously the most visible in Europe, so that’s most of all where I’m basing these conclusions on.

  • “Are these impressions just wrong?”

    Yes.

  • ““Are these impressions just wrong?”

    Yes.”

    OK

  • American Knight’s analysis is spot on. The question is how do we affect real Catholic change. The right are corporatists or zionist trotskyites ( Krystal and Strauss founders of neo con were trotskyites first)
    The Dems are the party of death and it matters little which modifier you use; liberal, socialist, or progressive. My latest suggestion is to keep throwing the incumbents out until they listen to us.
    We are to bring forth the Social Kingship of Christ, not play patty cake with evangelicals that think they are bringing the latter day rain.

  • I find it difficult to understand what this blog post has to do with Catholicism. Following the author’s logic, we should abolish minimum wage, indeed, all regulation of business, because it will affect prices. And it is of course not true that “progressives” are surprised by the reactions of (certain) businesses. If I may quote from your own comments’ policy:
    “I will not exaggerate others’ beliefs nor make unfounded prejudicial assumptions based on labels, categories, or stereotypes. I will always extend the benefit of the doubt. (Ephesians 4:29)”

  • Perhaps a better title for this post would have been “Progressives Are Not Skeptical Enough Of Business.” You see, there’s a big difference between being skeptical and being cynical.

    It’s OK to have a healthy skepticism of business, government, or even (up to a point) the Church. Ronald Reagan’s “trust, but verify” rule encapsulates that quite well. Blind and unquestioning faith in the fallen human beings who comprise any institution usually leads to trouble. Being prepared for the POSSIBILITY that one might be decieved, or that the other party has ulterior motives, doesn’t hurt.

    However, that is not the same as cynicism — the attitude that automatically ASSUMES people or institutions to be stupid, evil, or corrupt until (or even if) proven otherwise, and never expects any better from them. Cynicism, like flippancy (an attitude that automatically treats everything as a joke) dulls the intellect instead of sharpening it, and if unchecked turns into a cancerous contempt for others that is extremely toxic to one’s spirtual life.

  • “Seen from Europe I get the impression that (the Republican party) are often xenophobic and very warlike… Are these impressions just wrong?”

    What you are seeing, Richard, is a focus on the most extreme elements of the conservative movement/Republican Party. Every movement or political faction has its “fringe” elements, which don’t represent the majority of people involved, but which unfortunately tend to attract most of the media attention. I’m sure the same thing happens in your country.

    In fact, we in America probably get an equally simplistic, stereotyped or distorted view from OUR media of what’s happening in Europe and elsewhere in the world. It’s just the nature of the news media to do that. I hope that answers your question.

  • America is large and not Europe, though our politicos wish it were and work to change it into it. Look at the stats when this country was strong and wealthy after the last war we did not export but 5% of GDP. We made all kinds of things and now we do not. This is key to prosperity we make things to create wealth we do not take in other’s laundry that’s called service. It is parasitic. This is part of the reason for this crisis we have more parasites than are healthy for a political organism. We must rid the
    body of these parasitic diseases and promote healthy activities like small businesses, while getting rid of the terminal diseases like the Federal Reserve and fractional banking, the IRS, reduce the Federal Government to about 10% of it’s current size. Well you get the idea. We need to stop supporting Europe and pull all of our Nato troops and war machines out. Let the Russians take over. The EU has put obstacles in the way of American free trade in Europe so have a nice day, we are out of there. We can do it alone just like we did in the past and be the wealthiest country on the globe. The US is fighting a proxy war for the EU, or the Mohammedans would have taken over the Continent due to their physical superiority to the fighting forces in the EU. Remember France it was on TV and the French police looked like little skinny girls and could not control the Mohammedans. Fortress America with Catholic Ghettos are what we need again.

  • Tim,

    I agree on many of your points especially the Fed and fractional-reserve banking (usury); however, I would not call service oriented businesses parasitic. All businesses serve, some provide and intangible benefit, some provide manufactured goods, some facilitate (service). All are legitimate; however, we do need to get back to having a manufacturing base, not because there is something wrong with service, but because wealth is created by mixing man’s labor (with the intent on sanctification) with God’s creation for His glory.

    In truth the USA barely needs to import anything and we should be exporting our massive surplus to help the world and enculturate the world to freedom.

    As for letting the Russians take over – I am not cool with that at all. I do think we need to stop our imperial military and have the biggest baddest military around, but not send them anywhere without a firm purpose for defeating an enemy – utterly defeating an enemy. Our military should not be the policeman of the EU, we should not be nation-building and we should most certainly not be using our soldiers within the borders of the USA (on the borders – I am all for that). That being said, we cannot create a vacuum because the Russians, the Muslims and the Chinese will fill it – we can’t have that.

  • We have no surplus to export. We don’t make anything any more. Agri-business has killed vegetable farming we export corn syrup, soy oil, corn oil, etc. We need to import everything, we need food, we need clothes, we need tv’s nothing is made here any more.
    The service industries like accounting are now counted as part of the GNP thanks to Billy Clinton. Accountants do not make anything they count what has been done. This is perverse. It adds no wealth. Service business are a cost of manufacturing which produces wealth. They do not create wealth they suck it out of the economy, but they are clean jobs for college educated clerks.
    The most important thing is this the Chastisement which Our Lady explained at Fatima has not been fulfilled and Russia has not been consecrated. This chastisement which is coming will be worse than the Deluge.

    We have protected Europe it is time they grew up. If they can protect themselves Russia will not take over but I’m betting on Russia, because EU is effeminate

  • @tim mccarthy Russian is Orthodox now, and the EU atheist, so, it’d be an improvement.

  • Tim,

    Most accountants are progressives because they earn their livelihood as a result of burdensome government regulation and graduated income tax scheme. However, their are some services that are useful. Retail is one of those. Most people purchase the goods we used to manufacture through service retailers. Financial services professionals are usually progressives too because they tend to favor the evil Fed and corporatism. Some actually help people make smart decision about the stewardship of their wealth, sadly those are few and far between.

    Not having a manufacturing base is part of the globalization plan to erode the sovereignty of the United States of America. The intent is to kill the shining city on the mountain and it eventually will happen, but it does not have to be now.

    The kings of the earth who had intercourse with her in their wantonness will weep and mourn over her when they see the smoke of her pyre.
    They will keep their distance for fear of the torment inflicted on her, and they will say: “Alas, alas, great city, Babylon, mighty city. In one hour your judgment has come.”
    The merchants of the earth will weep and mourn for her, because there will be no more markets 5 for their cargo:
    their cargo of gold, silver, precious stones, and pearls; fine linen, purple silk, and scarlet cloth; fragrant wood of every kind, all articles of ivory and all articles of the most expensive wood, bronze, iron, and marble;
    cinnamon, spice, 6 incense, myrrh, and frankincense; wine, olive oil, fine flour, and wheat; cattle and sheep, horses and chariots, and slaves, that is, human beings.
    “The fruit you craved has left you. All your luxury and splendor are gone, never again will one find them.”
    The merchants who deal in these goods, who grew rich from her, will keep their distance for fear of the torment inflicted on her. Weeping and mourning,
    they cry out: “Alas, alas, great city, wearing fine linen, purple and scarlet, adorned (in) gold, precious stones, and pearls.
    In one hour this great wealth has been ruined.” Every captain of a ship, every traveler at sea, sailors, and seafaring merchants stood at a distance
    and cried out when they saw the smoke of her pyre, “What city could compare with the great city?”
    They threw dust on their heads and cried out, weeping and mourning: “Alas, alas, great city, in which all who had ships at sea grew rich from her wealth. In one hour she has been ruined.
    Rejoice over her, heaven, you holy ones, apostles, and prophets. For God has judged your case against her.” – Apoc 18:10-20

  • The lunacy on this blog is beyond belief. Certainly beyond catholic belief.

  • Why thank you for your kind remark Professor Simons. I am sure you are used to an ideological spectrum at Dartmouth that goes from far left to lunatic left, so I can understand your distress at being exposed to uncongenial currents of thought.

  • I understand the importance of having a strong manufacturing, and for that matter an agricultural, base to the economy — i.e. making, selling, and buying stuff — but since when are service jobs now classified as being bad and unnecessary? Doesn’t this imply that the ONLY “real” economic wealth or value lies in material goods? Aren’t knowledge, independence, skill, and just plain enjoyment of life economic goods as well?

    Service jobs are simply doing for others what they do not have the time, ability, or inclination to do for themselves — thereby freeing them to devote their time to do the things they CAN do, or want to do. When this comes about as a result of genuine demand — and isn’t artificially forced on people through excessive government regulation or other causes — how is that bad? And finally, isn’t the notion that real wealth only lies in “things” and not in serving others basically un-Christian?

  • Spot on Elaine. Although material wealth is measured only by the things produced, so in that sense service isn’t wealth; however, some services enhance wealth. Education and apprenticeship for example, without those how will most people have any idea how to create material wealth?

    As for the true wealth – we know that can’t be measured.

    Look where your treasure is, for there your heart will be also.

  • Simons,

    Care to elaborate? Levying an attack like that without any substance, hmm? When did that stop being beyond Catholic belief?

    You may have a little something in your eye.

  • We have no surplus to export. We don’t make anything any more.

    This is a myth, albeit a widespread one. America’s manufacturing output is actually much much higher now than in previous decades.

    What trips people up is that while the U.S. is making more stuff than ever before, we’ve gotten so efficient at doing it that it takes fewer people than before, so manufacturing employment has declined even as output has risen (the same is true, btw, for agriculture).

  • Bravo BA! That is a simple fact, but one that seems to elude most people.

  • I was a Manufacturing Engineer for thirty five years. I worked start-ups and turnarounds I am the wrong guy to try to bamboozle. This idea that we make as much now as then is another Progressive piece of bent truth. The dollars as a number have remained the same but our share of the industry as a percentage has diminished. I saw it, I fought against it. A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100. These companies were forced out of business by the progressive force of ISO conformance to the EU. The regs were intended to put America out of business. Nafta sent the rest of the jobs to China and India. It is all about how little they pay them, it has nothing to do with anything but that.
    What you really need to do is stop getting you info from the liberal news, watch fox news, but not the talking heads like Hannity etc, they are apostate Catholics which endorse contraception.

  • This idea that we make as much now as then is another Progressive piece of bent truth. The dollars as a number have remained the same but our share of the industry as a percentage has diminished. I saw it, I fought against it. A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100.

    I’m not saying that the U.S. makes as much now as in the past. It makes more. That’s just a fact, as the chart I linked to illustrates.

    It’s true that as a percentage of the world total, U.S. manufacturing output has declined in recent decades. But it doesn’t follow from this that U.S. manufacturing output has declined. Suppose, for example, that total manufacturing output worldwide doubles while America’s share of output falls from 20% to 15%. Our share of industry as a percentage would diminish, but we would still be making more stuff and before. This is basically what has happened (though the numbers are just for purposes of the example).

    Likewise, as I noted previously, a decline in manufacturing employment doesn’t imply a decline in manufacturing output. Indeed, one of the reasons manufacturing employment has fallen is that the manufacturing sector has become so productive that they can produce lots more stuff with fewer people.

  • Today’s Sunday I’m taking a day of rest.

  • A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100. These companies were forced out of business by the progressive force of ISO conformance to the EU.

    In addition to Blackadder’s point, which is undeniable, it’s worth noting that the upper midwest does not the entire US make (although in regards to manufacturing they’re used to thinking so.) The amount of manufacturing employment in the South and in Texas has increased over the last couple decades, even as the Great Lakes states have seen decreases in manufacturing employment (though not necessarily output.)

HHS Statement on Abortion Funding

Thursday, July 15, AD 2010

The Department of Health and Human Services has released the following statement regarding allegations that newly approved Pre-Existing Condition Insurance Plans would cover abortions:

As is the case with FEHB plans currently, and with the Affordable Care Act and the President’s related Executive Order more generally, in Pennsylvania and in all other states abortions will not be covered in the Pre-existing Condition Insurance Plan (PCIP) except in the cases of rape or incest, or where the life of the woman would be endangered.

Our policy is the same for both state and federally-run PCIP programs. We will reiterate this policy in guidance to those running the Pre-existing Condition Insurance Plan at both the state and federal levels. The contracts to operate the Pre-existing Condition Insurance Plan include a requirement to follow all federal laws and guidance.

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  • A case of “he says, she says”? Who’s right?

  • “The high-risk pool program is one of the new programs created by the sweeping health care legislation (the Patient Protection and Affordable Care Act) that President Obama signed into law on March 23. The law authorizes $5 billion in federal funds for the program, which will cover as many as 400,000 people when it is implemented nationwide.

    “The Obama Administration will give Pennsylvania $160 million in federal tax funds, which we’ve discovered will pay for insurance plans that cover any legal abortion,” said Douglas Johnson, legislative director for the National Right to Life Committee (NRLC), the federation of right-to-life organizations in all 50 states. “This is just the first proof of the phoniness of President Obama’s assurances that federal funds would not subsidize abortion — but it will not be the last.”

    An earlier version of the health care legislation, passed by the House of Representatives in November 2009, contained a provision (the Stupak-Pitts Amendment) that would have prevented federal funds from subsidizing abortion or insurance coverage of abortion in any of the programs created by the bill, including the high-risk pool program. But President Obama opposed that pro-life provision, and it was not included in the bill later approved by both houses and signed into law. An executive order signed by the President on March 24, 2010 did not contain effective barriers to federal funding of abortion, and did not even mention the high-risk pool program.

    “President Obama successfully opposed including language in the bill to prevent federal subsidies for abortions, and now the Administration is quietly advancing its abortion-expanding agenda through administrative decisions such as this, which they hope will escape broad public attention,” Johnson said.

    The U.S. Department of Health and Human Services (DHHS) has emphasized that the high-risk pool program is a federal program and that the states will not incur any cost. On May 11, 2010, in a letter to Democratic and Republican congressional leaders on implementation of the new law, DHHS Secretary Kathleen Sebelius wrote that “states may choose whether and how they participate in the program, which is funded entirely by the federal government.”

    Details of the high-risk pool plans for most states are not yet available. But on June 28, Pennsylvania Insurance Commissioner Joel Ario (a member of the appointed cabinet of Governor Edward Rendell, a Democrat) issued a press release announcing that the federal Department of Health and Human Services had approved his agency’s proposal for implementing the new program in Pennsylvania. “The state will receive $160 million to set up the program, which will provide coverage to as many as 5,600 people between now and 2014,” according to the release. “The plan’s benefit package will include preventive care, physician services, diagnostic testing, hospitalization, mental health services, prescription medications and much more, with subsidized premiums of $283 a month.”

    Examination of the detailed Pennsylvania plan, reveals that the “much more” will include insurance coverage of any legal abortion.

    The section on abortion (see page 14) asserts that “elective abortions are not covered.” However, that statement proves to be a red herring, because the operative language does not define “elective.” Rather, the proposal specifies that the coverage “includes only abortions and contraceptives that satisfy the requirements of” several specific statutes, the most pertinent of which is 18 Pa. C.S. § 3204, which says that an abortion is legal in Pennsylvania (consistent with Roe v. Wade) if a single physician believes that it is “necessary” based on “all factors (physical, emotional, psychological, familial and the woman’s age) relevant to the well-being of the woman.” Indeed, the cited statute provides only a single circumstance in which an abortion prior to 24 weeks is NOT permitted under the Pennsylvania statute: “No abortion which is sought solely because of the sex of the unborn child shall be deemed a necessary abortion.”

    As a result, “Under the Rendell-Sebelius plan, federal funds will subsidize coverage of abortion performed for any reason, except sex selection,” said NRLC’s Johnson. “The Pennsylvania proposal conspicuously lacks language that would prevent funding of abortions performed as a method of birth control or for any other reason, except sex selection — and the Obama Administration has now approved this.”

  • I disagree. I think the assumption should remain that abortion is being funded and that the Administration should be forced to affirmatively show that abortion is NOT being funded EVERY TIME one of these funding decisions is made.

    They are the ones who fought the inclusion of the Stupak language, and the burden of proof, therefore, remains with them on a case-by-case basis to show that federal funds are not being expended on abortion.

    I’m not worried about crying wolf because (a) because I don’t believe for one minute the Administration’s protestations that abortions aren’t being funded and (b) every time the Administration has to issue one of these denials it reinforces in the mind of the public that federal funding of abortion is taboo.

  • It seems from Donald’s link that abortions are being funded – and not just those allowed by the Hyde Amendment. Is what NRLC is reporting false?

  • The problem I have with HHS is that they don’t state where the prohibition occurs. The EO is useless in the face of the actual law. Which is why I’ve asked defenders to point out where in the federal law the funds are prohibited from funding abortions.

  • It looks like this is a case of crying wolf, and if it is, it discredits the pro-life movement. We can’t afford to look foolish. What scares me is that the administration’s defenders are replying that (a) no money will go to abortion, (b) it’s not much money anyway, and (c) the program will do a lot of good. I don’t see a reason to make the last two points, unless the arguments are being field-tested for future use.

  • At least some money will be going to fund abortionsw if it pays for abortions in cases of “rape, incest or to save the life of the mother.” Even though these are in the Hyde Amendment, they are contrary to Catholic moral teaching. They were put into the Hyde Amendment to ensure passage – an acceptable political move if complete prohibition would have stopped passage.

    The question here is, even using the Amendment, is there a net increase in the killing of babies even if only for these politically accepted reasons? If so then Obamacare does increase abortions.

    The next question is, if there is an increase in abortions, did the provision of health care to more individuals justify this increase in abortions?

  • July 14, 2010

    The Honorable Kathleen Sebelius

    U.S. Department of Health and Human Services

    200 Independence Avenue, S.W.

    Washington, D.C. 20201

    Dear Secretary Sebelius:

    We have recently learned that the Pennsylvania application to administer a federally subsidized Pre-Existing Condition Insurance Plan (also referred to as a high-risk pool) for individuals with pre-existing conditions contains a provision that allows federal funding for abortion in virtually any case except sex-selective abortion. Similarly, we understand that a draft summary of benefits for New Mexico’s Pre-Existing Condition Insurance Plan explicitly lists elective abortion as a covered, and therefore subsidized, service.

    Both of these cases will result in funding for abortion in direct contradiction of longstanding U.S. policy against federal funding of abortion or abortion coverage. Unfortunately, statutory language prohibiting such funding was not included in the recently enacted Patient Protection and Affordable Care Act (PPACA). Instead of a statutory prohibition, the President assured Members of Congress by signing an Executive Order that claimed to ensure that abortion would not be funded under the authorities and appropriations provided in PPACA. However, further details regarding how this assurance would be implemented and enforced have not been released.

    In light of the newly discovered information about the Pennsylvania and New Mexico Pre-Existing Condition Insurance Plans and the paramount importance of this issue, we would request the following information no later than close of business Friday, July 16, 2010.

    1. A list of all states and the District of Columbia that plan to administer federally funded high-risk pools at the state level, including the following for each:

    a. whether an application has been submitted,

    b. whether an application has been approved, and

    c. a copy of any application that has been either submitted or approved.

    2. According to the HHS website (http://www.hhs.gov/ociio/initiative/), “HHS has contracted with the Government Employees Health Association (GEHA) to administer the Pre-Existing Condition Insurance Plan” that will provide high-risk insurance to individuals in 21 states. Please provide a list of the states that have indicated they intend to opt into the GEHA program rather than establish their own state program, and a copy of the complete contract with GEHA including any language regarding abortion.

    We look forward to your prompt response.

    Sincerely,

    [Signed by John Boehner, Eric Cantor, Mike Pence, Joe Barton, Darrell Issa, Chris Smith, and Joe Pitts]

  • The PA plan states it will not cover “elective abortions.” What abortions fit the requirements? According to 18 Pa. C.S. § 3204:

    “In determining in accordance with subsection (a) or (b) whether an abortion is necessary, a physician’s best clinical judgment may be exercised in the light of all factors (physical, emotional, psychological, familial and the woman’s age) relevant to the well-being of the woman. No abortion which is sought solely because of the sex of the unborn child shall be deemed a necessary abortion.”

    Why did administration officials not ask that this be changed when the PA plan was approved? Did someone in the govt. just not read it? And if, according to state and Federal officials, Federal law will take priority, will they go back and change it?

  • Another update. Perhaps there is also problems with New Mexico’s plan and the Executive Order may not cover high-risk pools:

    http://lifenews.com/nat6540.html

  • From Life News:

    “Meanwhile, Bakus claimed the state web sites containing information about the high risk pools, that provided the information NRLC used to verify the abortion funding, will be updated in the next couple of weeks to show they will not fund elective abortions.

    “If HHS does now issue new directives to keep abortion out of this particular program, it will be because NRLC blew the whistle on them,” Johnson said. “The Obama Administration shows a pattern of relentlessly pushing pro-abortion policies through the federal agencies and on Capitol Hill, whenever they think they can do so under the public radar — and then scurrying for cover when the spotlight comes on.”

    That both states reported they would cover elective abortions is not a dispute, although both appear to be backtracking after Right to Life uncovered the abortion funding.

    The Associated Press reported Wednesday that New Mexico “initially listed elective abortion as a covered benefit” but then “reversed course” after AP inquired about the coverage NRLC discovered.

    Michelle Lujan Grisham, deputy director of the New Mexico Medical Insurance Pool, told AP that the state’s contract with HHS stipulated the plan must follow federal law but did not spell out details on limits to abortion coverage.

    “As a result, New Mexico included elective abortion as a covered benefit, following what it was already doing with its own state health programs,” AP indicated.

    NRLC identified how the Internet site describing the New Mexico plan listed “elective termination of pregnancy” as a covered benefit and noting how it would pay for 80 percent of the cost of the abortion after the insured woman met the $500 deductible.

    Grisham initially told AP the state would follow through on that plan but then called the news outlet back later Wednesday saying otherwise: “We are in the process of correcting the package so it will not have elective abortion coverage.”

    Pennsylvania officials are backtracing as well, with Rosanne Placey, a spokeswoman for the state insurance department, telling AP the high risk pool will now not cover elective abortions: “That is not part of the benefit package.”

    Backus also said the Obama administration would ensure any abortion coverage under the new national health care program would be limited to cases when the mother’s life is in danger or rape and incest — which the Hyde Amendment limits funding of abortions to regarding other funding from the federal government, but which does not apply to the new health care law.

    Johnson ultimately told LifeNews.com: “I can and have been asked, can the Administration be trusted? Sure, they can be trusted — to try to expand federal support for abortion every sneaky chance they get.”

    “Everybody needs to constantly watch what people in this Administration are doing, not what they are saying,” he concluded.”

    http://lifenews.com/nat6540.html

  • Pingback: Rampant Dishonesty Continues « Vox Nova
  • Who are these people suddenly worried about “crying wolf” and being labelled as “crying wolf”? The bishops along with every other group concerned about murder said abortion was covered under this law. Independent news reports verify that until yesterday when prolifers made a cry (of wolf (Ha Ha)) abortion was on the website as covered.

    “But at least one state — New Mexico — initially listed elective abortion as a covered benefit, reversing course after The Associated Press inquired on Wednesday.”

    http://www.deseretnews.com/article/700048295/More-questions-on-health-plan-abortion.html?s_cid=rss-5

    These WOLVES need to worry about their credibility before GOD and what eternal damnation feels like not to mention what an aborted baby feels–and her mom and dad when they wake up to what they did–and stop throwing up RED HERRINGS. Whose paying you–CHA?

  • It seems on one of the threads over at Vox Nova they have stopped anyone commenting on how the Hyde Amendment results in more abortions under Health Care Reform. No refutaion of the argument, just prohibting comments on it. Now it couldn’t be because people are right?

    http://vox-nova.com/2010/07/15/rampant-dishonesty-continues/#comments

  • Rampant Dishonesty Continues « Vox Nova says:
    Thursday, July 15, 2010 A.D. at 12:06 pm

    Somebody please read our blog. Somebody. Please. Hello?

  • For programs such as Medicaid and Children’s Health Insurance Programs that are jointly funded by the states and federal government, each state has to draw up a set of rules that specify who is covered, for what procedures/treatments and under what conditions. These rules are called “State Plans.”

    All State Plans, and any significant changes made to a State Plan, must be approved by the federal Centers for Medicare and Medicaid Services, which is a division of HHS. As long as a State Plan doesn’t directly conflict with federal law, it is usually approved, so states do have some discretion.

    State Plan amendments also normally have to go through a period of review and public comment at the state level — this varies depending on each state’s administrative law — before they can be adopted as well.

    Apparently, these federally subsidized high risk insurance pools MAY operate in a similar manner. If that is the case, when each state draws up its plan, it will be done in the form of rules promulgated by the agency that administers the plan in each state. In most states, that includes some kind of public comment period, and if they know they are going to get a lot of negative public comment, they can usually be persuaded to backtrack on those rules.

  • Read this op-ed by Helen Alvare, one of the most intelligent and thoughtful people I know – http://www.thepublicdiscourse.com/2010/07/1423

  • Just an update. It seems NPR believes that neither the health care law nor the Executive Order prohibits abortion funding for high risk pools. Also seems, per NPR, that New Mexico was already using Federal funds for elective abortions in their high risk pool.

    http://www.npr.org/blogs/health/2010/07/15/128546416/abortion-supporters-now-blast-adminstration-over-health-law

Remembering Bastille Day

Wednesday, July 14, AD 2010

Today is Bastille Day, typically associated with the start of the French Revolution. In honor of that blessed event, I offer up this classic piece by John Zmirak:

Remember when the L.A. riots spun out of control, and engulfed the whole United States? The key moment was no doubt when police and Army commanders took fright and changed sides, throwing their support to the Committee for Public Safety led by Tom Hayden, along with Noam Chomsky, Barbara Boxer, Michael Moore, and Edward Said. After Hayden’s fall and execution, his successor, Marion Barry, insisted that President Bush and his wife Barbara be tried for treason. Their executions shocked the world but sparked wild celebrations in the capital, as the First Couple’s severed heads danced on poles in daylong parades. A crack whore was duly enshrined in the National Cathedral as the Goddess of Reason.

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  • They have a half-decent natonal anthem. ‘Nuff said.

  • Really interesting article. Thanks for the link.

  • Irving Babbitt divided the world of political philosophy into those who were followers of Edmund Burke and those who were followers of Jean-Jacques Rousseau. The contrast between the American and French Revolution beautifully encapsulates this dichotomy. The French Revolution was one of the most disastrous and horrible events in the history of the world, so kudos to Zmirak.

  • Thus beginning the tradition of starting a new French Republic every couple of decades, which has continued down unto the present day…

  • “Blessed Solomon Leclercq, 1745-1792
    “Feast day: September 2

    “Blessed Brother Solomon Leclerq was beatified on October 17, 1926. Born in 1745, he lived in France, during a time of revolution. The common people rose up against the kings of France, and established a more democratic form of government. As part of this revolution, the new leaders made times difficult for the official religion, Christianity. All Christian organizations became illegal. The Christian Brothers and their work were almost totally dismantled. Bro. Solomon was among these Brothers. He joined the Brothers in 1767, was a devoted teacher and skilled financial manager. These Brothers refused to swear loyalty to this new government. They had to live in secrecy. In 1792, he was arrested by the government, imprisoned with several other church leaders, and, in 1727 (sic), executed. (sic) He, and his prison companions were martyred about a month later. (sic)”

    I edited out some of the PC lies, but . . . left some in for your edification. Plus, someone should have proof read the copy.

    See how they gloss over tyranny, thousands of drumhead executions. The quote is from a Christian Brothers high school site. Note: the author doesn’t state that the brothers’ vocations were to educate poor boys, who would not be educated after 1792. The official religion was Catholicism, not “Christianity.” Sound familiar?

  • My favorite rendition of the French national anthem:

    A post about my favorite Frenchman:

    http://almostchosenpeople.wordpress.com/2010/07/14/our-french-founding-father/

  • Great movie: Casablanca.

    Ach! “Die Wacht am Rhein.”

    That was just about all they could do at the time: sing and weep.

    Lafayette, nous voila (I think)! “Lafayette, we are here!” Spoken by one of Pershing’s staff (I think at lafayette’s tomb) in 1917. And 1944. America doesn’t owe them anything.

  • Thus beginning the tradition of starting a new French Republic every couple of decades, which has continued down unto the present day…

    Constitutional government in France has, since 1860, been interrupted only by German invasion and occupation (in 1870-71 and 1940-46).

  • Constitutional government in France has, since 1860, been interrupted only by German invasion and occupation (in 1870-71 and 1940-46).

    I would consider the May 1958 crisis, if not technically an interruption of constitutional government, then at least close enough for purposes of the witticism.

  • The 1968 Riots are another potential disruption of civil government.

    They rioted for the right to be over-payed government workers.

  • Thanks for the post! My favorite version of the French anthem is the royalist parody, sung by the heroic Catholic rebels of the Vendee:

    Here’s the French text and an English translation (reproduced, with sheet music in my “The Bad Catholic’s Guide to Wine, Whiskey and Song”:

    I

    Allons armées catholiques
    Le jour de gloire est arrivé!
    Contre nous de la république
    L’étendard sanglant est levé (repeat)
    Entendez-vous dans nos campagnes
    Les cris impurs des scélérats ?
    Qui viennent jusque dans nos bras
    Prendre nos filles, nos femmes !

    Refrain: Aux armes vendéens ! Formez vos bataillons ! Marchez, marchez, Le sang des bleus Rougira nos sillons !

    II Quoi des infâmes hérétiques
    Feraient la loi dans nos foyers?
    Quoi des muscardins de boutiques
    Nous écraseraient sous leurs pieds? (Repeat)
    Et le Rodrigue abominable
    Infâme suppôt du démon
    S’installerait en la maison
    De notre Jésus adorable

    Refrain

    III Tremblez pervers et vous timides,
    La bourrée des deux partis.
    Tremblez, vos intrigues perfides
    Vont enfin recevoir leur prix. (Repeat)
    Tout est levé pour vous combattre
    De Saint Jean d’Monts à Beaupréau,
    D’Angers à la ville d’Airvault,
    Nos gars ne veulent que se battre.

    Refrain

    IV Chrétiens, vrais fils de l’Eglise,
    Séparez de vos ennemis
    La faiblesse à la peur soumise
    Que verrez en pays conquis. (Repeat)
    Mais ces citoyens sanguinaires
    Mais les adhérents de Camus
    Ces prêtres jureurs et intrus
    Cause de toutes nos misères.

    Refrain

    V
    Ô sainte Vierge Marie
    Conduis, soutiens nos bras vengeurs!
    Contre une sequelle ennemie
    Combats avec tes zélateurs! (Repeat)
    A vos étendards la victoire
    Est promise assurément.
    Que le régicide expirant
    Voie ton triomphe et notre gloire!

    Refrain

    Translation by Charles A. Coulombe

    I Let us go, Catholic armies the day of glory has arrived! Against us, the Republic Has raised the bloody banner. (Repeat) Do you hear in our countryside the impure cries of the wretches? Who come—unless our arms prevent them— To take our daughters, our wives!

    Refrain To arms, Vendeeans! Form your battalions! March, march, The blood of the blues [revolutionaries] Will redden our furrows!

    II What of the infamous heretics Who would make the law in our homes? What of the mercenary cowards Who would crush us under their feet? (Repeat) And abominable Rodrigue [Antoine Rodrigue, a local bishop who defied papal authority to cooperate with the Revolution] Infamous henchman of the demon Who would settle in the house Of our adorable Jesus?

    Refrain

    III Tremble you perverse and timid, Before the bonfires of the adversaries. Tremble, your perfidious intrigues shall finally receive their due. (Repeat) All are raised to fight you From Saint Jean d’Monts to Beaupréau, From Angers to the town of Airvault, Our lads want to only fight.

    Refrain

    IV Christians, true sons of the Church, Reject your enemies and The weakness and the servile fear Which you see in a conquered country. (Repeat) But these bloody “citizens,” These allies of Camus, [Armand-Gaston Camus, Secretary of the Revolutionary Convention, who led in the move to seize Church property and execute the king.] These treasonous and imposed priests [This refers to the “Constitutional” priests who had sworn loyalty to the government over the pope, and were rewarded with the parishes of priests who refused; the latter were considered heroes.] Are the cause of all our miseries.

    Refrain

    V
    O Blessed Virgin Mary,
    Lead and support our avenging arms!
    Against an enemy gang,
    fight alongside your zealous warriors! (Repeat)
    To your standards
    is promised certain victory.
    The regicides’ death
    Shall be your triumph and our glory!

Inequality: Can't Live With It, Can't Live Without It

Tuesday, July 13, AD 2010

In my last post I looked at the question of how to calculate the just or living wage, using figures from Father Ryan’s classic text A Living Wage brought up to date by adjusting for inflation. Commenter Restrained Radical, however, thinks that in merely adjusting for inflation I was being too stingy:

Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

In 2008, median household income in the United States was $52,029. If Restrained Radical’s interpretation is correct, then it would seem Father Ryan was advocating a kind of Lake Wobegon society, where everyone has the right to an above average income.

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0 Responses to Inequality: Can't Live With It, Can't Live Without It

  • Many countries use some percentage of median household income as a measure of poverty. That’s workable but arriving at an appropriate percentage is difficult. Ideally, we’d ask everyone, “Assuming you have no assets and receive no government assistance, at what income level would you consider yourself poor?” Then adjust for geography, household size, assets, and maybe age to determine who to help.

  • LOL. I’ve known people who had next to nothing and would never consider themselves poor, and I’ve known people who consider themselves in horrible financial distress because they cannot pay private college tuition. I really doubt that there is any practical room for subjectivity in the analysis.

    I think the real point of Blackadder’s cogent essay is that there is a difference between attacking income inequality as such versus attacking poverty. There is a far greater political consensus in favor of the latter than former, and it is exceedingly difficult to attack the former without making making the latter problem worse.

    I have often proposed this simple thought experiment. Posit a world with three families, the Kings, the Queens, and the Princes: This world can organize itself into two different societies with two different outcomes. Assume the rules of neither society involve slavery, coersion, dishonesty or other intrinsic evil. In the first society the standard of living outcome is Kings 100, the Queens 15, and the Princes 10. In the second society the standard of living outcome is 5 for each family. Which society is preferable? In my experience the responses are revealing.

  • I’ve known people who had next to nothing and would never consider themselves poor, and I’ve known people who consider themselves in horrible financial distress because they cannot pay private college tuition. I really doubt that there is any practical room for subjectivity in the analysis.

    So very true Mike. It was a heartening thing to hear my kids talk about helping the poor, especially when we would drop off bags of clothes and toys at St Vincent de Paul. However, they never made any connection to our shopping there.

    Really, our nation is probably too wealthy for its own good. As Catholics we customarily say grace before meals. It’s a good and an ancient practice. Gratitude for life and every little blessing *should* permeate our souls. I fail at it and I’m confident others do too, though how wrong headed is it of us as a society to not only be ungrateful for things like food, clothing and shelter – presuming their existence and availability – and then debating whether a cell phone is a real necessity. We can’t even be grateful for little technological gadgets in their own context. We assume they are core to our existence. We are so friggin’ spoiled…

  • One small additional note.

    Please keep in mind that income and wealth are not the same thing; and that income and productivity aren’t quite the same thing although they’re more closely related than income and wealth.

    At one point Restrained Radical said, “Real GDP per capita grew faster than inflation. In other words, Americans got wealthier.” This is not quite right; Americans started producing more, and presumably their income increased by some amount also although it needn’t be exactly proportional. And if their cost of living didn’t increase at the same rate as their income, then their wealth increased, in proportion to the degree that their disposable income was disposed in liquid or illiquid forms.

    Anyhow, a failure to appreciate these distinctions can lead to distortions in the conversation about “living wage.” A person with zero income can live quite nicely — ask Teresa Heinz Kerry, for example; at the time of the 2004 elections she’d been able to report tiny income and no “wages” for several years running — if they have sufficient liquid wealth to live off of.

    Indeed, the term “living wage” itself contains the distortion to some degree by focusing on “wage” rather than something like “wage plus net wealth divided by remaining life expectancy.” (Not exactly a phrase which rolls trippingly off the tongue!)

    Of course, the difference between one region’s cost of living, and another’s, comes into play. And there is the problem of determining what, exactly, constitutes the “living” of which one is measuring the cost, and how accurately one can gather information about wealth and income.

    In the end, the topic is sufficiently complex that subsidiarity comes into play: It is better that people closer to the problem (and, especially, people not insulated from the consequences of the policy decisions they make) be the ones who make policy on such issues. And it is preferable that their policy affect only a small group of persons on the same “level” of organization as they, but that they be free to observe the consequences of alternative policies on other peer groups implementing those policies, allowing all groups on a given level to make informed decisions about which policy is best. This, of course, was the fundamental truth (and thus, the Catholic truth) behind American Federalism…back when it still existed in a robust way.

    It is because of this subsidiarist logic that I am nearly libertarian about federal policy, a mainline conservative about state policy, a moderate or centrist about county-level or metropolitan-area-level policy, a mild authoritarian about township- or neighborhood-level policy, and a benign but occasionally totalitarian divine-right monarch within the bounds of my household.

    But I am digressing. My main point is: The topic is complicated enough as it is. Subsidiarity helps with that at a systemic level; but in the meantime, watch out you don’t make it more complicated by conflating productivity with income or income with wealth.

  • “You will always have the poor among you.”

    – God

    Smart post, BA.

  • RC, you’re right which is why consumption may be a better measure of poverty than income. Though, with the poor, the two are usually fairly closely correlated.

    Re subsidiarity: I’d agree to the extent that local government can and does fulfill its obligations. Many towns cannot or will not either because they don’t have the finances or they don’t have the political will. That doesn’t automatically mean that welfare should be a federal program but it does mean that the federal government needs to play a role.

  • I know people who have excess wealth, and it can almost be a curse at times. Their lives become so occupied with money.

    There should reasonable help from the state/federal governments for people who need assitance, like housing, food, etc. But, charaties for instance, do a lot of good, our parish is always helping the poor. Helping poor people should not be solely a government issue…if you want a healthy society.

  • In any event, government at whatever level should supplement, not displace, private charity.

    Otherwise it is another instance of “bad money crowds out good money”; with the problem of neediness in no way helped, but with good and morality-reinforcing means replaced by questionable and corruptive means.

    Sadly, I believe that government assistance to the needy does, in fact, crowd out private assistance, at very nearly a one-to-one proportion when exercised at the federal level. I suspect that proportion improves at the lowest levels, when the folk being helped can personally meet on the streets the persons who are helping them.

    If I am right about that, then having the federal government get involved when there is a failure of local government provision (which failure itself should only occur when there is a failure of local private provision) is counterproductive: It crowds out not only the remaining good local private money and any possibility of private money from adjacent communities, but also crowding out local government money, which is the least-corruptive type. As with nearly every other occasion when government acts outside its core mission, it fails to solve the problem while creating new ones.

    That, of course, is a generalization. But it’s the kind of generalization which makes the safest starting-point for the consideration of policy.

  • Jasper:

    You state: “Helping poor people should not be solely a government issue…if you want a healthy society.”

    Exactly.

    Or, well, no, I take that back. What you said is a very good start, but it could be amplified, and the principle clarified, as follows:

    If you want a healthy society, helping needy people is not primarily or even secondarily a government issue.

    It is primarily an issue to be addressed by those who know the needy person in question, including their church.

    It is secondly an issue to be addressed by their local community government, as a source of assistance to their family, friends, and church.

    It is thirdly an issue to be addressed by the government of the county or metropolitan area in which they reside (providing backup assistance to family, friends, church, and community)…in the minority of cases that the problem wasn’t adequately handled at the community level or lower.

    It is fourthly an issue to be addressed by the state in which they reside (providing a tiny additional layer of backup to the family, friends, church, community, and county/metro area)…in the rare cases it couldn’t be handled at the county/metro-area level or lower.

    It is, fifth and least importantly, and with the least burden and the least control, a responsibility of the federal government to provide some additional assistance, should all the other levels of assistance somehow, in very rare cases, fail to get the job done.

    Over the course of fifty years, if one were to keep track of all charitable handouts given in a particular neighborhood, one ought to find that fully half of the assistance was provided by friends and family and church; another 25% by the community, another 10% from the county or metro-area, another 6% from the state, and the last 4% from the federal government. Or some such numbers, anyway: Those precise numbers would vary, but I offer them in order to exhibit the general principle.

  • Sadly, I believe that government assistance to the needy does, in fact, crowd out private assistance, at very nearly a one-to-one proportion when exercised at the federal level. I suspect that proportion improves at the lowest levels, when the folk being helped can personally meet on the streets the persons who are helping them.

    If government ceased all assistance, private assistance isn’t going to pick up anywhere near 100% of the tab. You may get a better ratio at the community level, but I don’t think there will be much difference between higher levels of government. Given the same rights and obligations, a state as large and diverse as California won’t act very differently from the federal government.

    Is it more in keeping with subsidiarity for private institutions to ration goods and services or to provide cash and leave the allocation decisions to the individuals and families? Is it better to give someone a can of corn or to give him a food stamp to buy whatever food he needs? I think it’s clearly the latter. Private institutions are well suited to offer goods that people want to get rid of (second-hand goods and surplus goods). They’re also good at providing services run by volunteers. But cash assistance is preferable to the provisioning of marketable goods and services.

    If we’re giving the poor cash, the cheapest cost avoider when determining who needs cash and how much is the entity that has access to income, asset, and consumption records which is always the government (usually the state is the lowest capable level in this regard though even the state would probably need higher level cooperation to keep track of interstate commerce). That still doesn’t necessarily mean the government needs to be the distributor. I suppose private institutions can hand out checks if the governments makes its records available to private institutions but then there’s the privacy concern. On the one hand, we may not want to disclose such information. On the other hand, the shame may incentivize the poor to work their way out of poverty. If privacy, is a concern, the government should also be the distributor of financial assistance.

  • RR:

    Oh, I don’t doubt that there are obvious advantages to using government; e.g., that they know about people’s incomes.

    And, in fact, if one is using government to centralize the collection on voluntary donations, which are then turned over to the poor under the banner of “the generosity of your fellow citizens,” then some of my concerns go away.

    But government usually does not collect voluntary donations; it levies taxes. It does not grant unexpected gifts identified as the extraordinary kindness of other persons; it allows persons to claim their “entitlements” from a government controlled by the politicians for whom they may later vote.

    This has an altogether different “vibe” from the anonymous contribution slipped under the door by a neighbor.

    A person who gives voluntarily increases in charity and grace and magnanimity in the process; he learns to love. A person from whom his daughter’s potential college savings are taken by a guy for whom he didn’t vote learns no love in the process.

    The charity worker who collects voluntary donations sees the goodness of human beings reflected in every dollar. The taxman sees that human beings will do pretty much what you tell them to do, when you point a gun at them.

    The charity organization is founded by people on a mission to love others, whose message to potential donors awakens the donors’ consciences. The government is filled with politicians who see political advantage whenever they can wring money from people who won’t vote for them anyway, and send it to their home constituents in order to purchase their immediate gratitude and their eventual re-election vote.

    The recipients of voluntary charity learn humility and gratitude and the fact that their fellow men aren’t all bad…and if that charity comes through a church ministry, they learn on a visceral level to associate provision with the body of Christ. The recipients of “entitlements” learn that if you vote for the right guy, that guy will take a nightstick to some people you don’t know, and you can get those people’s money. They also often learn that it’s other people’s responsibility to subsidize their bad decisions, and that when they’re in need, it’s because the world owes them and isn’t paying up like it ought. And they often lose self-respect while not learning humility, because leeching off others is very different from benefiting from the generosity of others.

    In countries where the Church is the primary or only source of assistance, the Church is therefore central in the life of the community, and everyone can think of a time when they, or a relative, owed much to Christians. In countries where the state is presumed responsible for most or all assistance to the poor, the Church is an inexplicable and irrelevant sidecar to society with no obvious purpose or role.

    So I think that one of the problems when government gets too involved in this stuff is that it’s bad for the soul of the taxpayer, bad for the soul of the taxman, bad for the soul of the politician who organizes all of it, bad for the soul of the guy who voted him in, bad for the soul of the recipient, and tends to undermine the Church’s rightful position in society, which is bad for society in the long term.

    Whatever the advantages of government knowing people’s incomes, then, I think these disadvantages probably outweigh them.

    And, really, if I had a choice between a private firm (required by law to respect my privacy) knowing my income, and the government (required by law to respect my privacy) knowing my income, I might be happier with the private firm. After all, if they decide to violate my privacy, I can sue the pants off them. Their deep pockets might make it difficult, but those same deep pockets might bring me a lot of relief, if I win.

    But suing the government can be trickier, if they decide to change the law in a way that violates my privacy: Sovereign immunity may apply. Bringing a lawsuit over the content of the laws against the guys who make the laws is rather like assaulting a mental hospital with some bananas and a package of mixed nuts.

0 Responses to Just How Much Is a Just Wage?

  • These are interesting formulations to find out what a just wage might be today.

    But, one would have to add in the college expense factor for today’s times. In Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity and the sum per month that one pays for their loans can be quite high.

    I will be checking into Father Ryan’s book soon.

  • Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity.

    I’m pretty sure you don’t need a college education to earn $6.15 an hour.

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays. With this low wage a single person and especially a family would need government help. While help from the government is one thing for a temporary period of time, I don’t think that $6.15 per hour would be considered a fair wage to live on especially when it seems evident that one would need permanent assistance from the government if the person/family tried living on $6.15 per hour. This seems more like a college student’s wage or a teenager who lives at home with his parents.

    If a family meets the minimum cost of living in a given country is that really acceptable according to Catholic Social teaching?

  • Interesting– federal minimum wage is over a dollar more than that.

  • I haven’t read or even heard of Father Ryan’s book before, but it’s interesting that he actually made an effort to define how much a living wage was. It’s also interesting that his calculations, even when adjusted for inflation, still come out well below the current federal minimum wage. Also, his hourly figures are somewhat skewed by the fact that the average work week was considerably longer in his time (48-60 hours, as opposed to 40 today), meaning the baseline annual wage figure was being spread out over more hours.

    I don’t know how he arrived at his figures for 1919 but I’m guessing they probably did NOT include the cost of owning an automobile, since that was not yet considered a “necessity” for most people, especially in cities where public transportation via streetcars and trains was readily available. If he included electric and telephone service in his estimates (those would have been available in urban areas but many rural areas lacked those services well into the ’20s and ’30s), well, that would have been for a very rudimentary level of service — just a few lights and maybe one party-line phone line — nowhere near what most households require today for appliances and electronics. The main household heating fuels at the time would have been coal or wood, and I’m not sure how those costs would compare to heating oil or natural gas today.

    In general I think a living wage should be paid for all full-time jobs that require education or training beyond high school. But, did Father Ryan ever tackle the question of whether unskilled entry-level jobs that were usually performed by children, teenagers, or housewives simply to supplement their family income, or provide pocket money for themselves since they did not have to support themselves, also required a living wage? If it were morally obligatory to pay the kid who mows your grass every week or the girl who babysits your kids while you go to a movie a “living wage,” very few people would be able to afford such services, and young people would lose the opportunity to gain valuable experience in handling their own money.

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing. If we take a 1/3 of your proposed living wage today for housing, we end up with ~$400 to go towards housing for 5 people. Using the federal poverty guideline, you end up with $700/m. There are quite a few places in the country where you will have extreme difficulty finding housing with that budget.

  • Not sure how accurate this is, but this site has a “time capsule” for 1918.
    Price of a Gallon of Milk $.55 (9.32, modern)
    Price of a Loaf of Bread $.10 (1.41, modern)

    Milk is artificially controlled, but even the most fancy-smancy organic stuff in glass bottle is maybe six bucks a gallon. I don’t know what the bread they had looked like, but bargain loafs can be gotten for .99c (those ones with the roman on the emblem?) and up to about six bucks for the fancy ones.

    It also says the cost of a home was 4,821.00, which would be $68,102.96 in modern costs; There are houses at that price…. (Chose Spokane because they’re in neither a boom nor a bust.)

  • They didn’t have all the non-wage employment costs back then, either, did they? I know the shorthand formula I’ve been told for small businesses is figure hiring someone will cost half again their salary. (One of those radio finance shows where folks call in, so who knows.)

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing.

    If you look at an inflation-adjusted Case-Shiller, it looks like real housing prices were only a little higher in 2000 than they would have been in 1900, though there were some sizable swings in the middle (and of course average house size has more than doubled over the period).

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays.

    No doubt what Father Ryan (and others writing at the time) would have considered a normal and sufficient standard of living would now be considered intolerable poverty. Standards for what is sufficient seem to be a bit like our shadow; as we move forward it follows right along behind us. Which suggests that it may not be even possible to have a society where everyone receives a “living wage.”

  • “I don’t know what the bread they had looked like”

    In 1919 it still came in solid loaves that purchasers had to slice themselves. Pre-sliced bread was first marketed in the late 1920s, and was such a popular innovation that it prompted the expression “the greatest thing since sliced bread.”

  • That does help a bit, but I was thinking more like was it the size of a “bread loaf” you get from a loaf-tin, or a “bread loaf” you get at the store (think wonderbread) or the “bread loaf” that’s baked on a pan after being formed? How much bread was there, what sort of grain was it?

  • I’m pretty sure you don’t need a college education to earn $6.15 an hour.

    I’m sorry Teresa, BA’s retort gave me a good chuckle.

    If you’re willing to use the bus, split the rent with more than one person in an apartment, and not eat out, you certainly can live off of $6.15/hour.

    Maybe if you rent the couch for $100/mo, then it’s certainly possible to live off of that.

  • Btw, Father Ryan’s book is available for free via googlebooks.

  • I gather it was about the same size and shape as the bread loaves you see today. If you google “sliced bread”, you can find pictures of the 1928 newspaper advertisements for the very first bakery to sell sliced bread, the Chillicothe (Missouri) Baking Company. The loaves pictured look about the same as bread loaves today do. The town of Chillicothe, Mo., in fact, now bills itself as the “Home of Sliced Bread” and has an annual Bread Fest to commemorate its place in culinary history.

  • I don’t know how Fr. Ryan arrived as his figures but I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living war is to ensure that every man can live a life of dignity. You can live in Zimbabwe in dignity without running water. You can’t do that in America.

    And why use a family of 5 and not a family of 10? Are we supposed to let the family of 10 live off less than a living wage? A living wage necessary varies according to the number of dependents. Any family receiving less should be aided.

    Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

    If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

    Based on rough calculations I did a few years back, I think the federal poverty guidelines are too low. For a single person, I think $14,000 is appropriate and $5,500 for each dependent. For a family of 5, that would be $35,500.

  • The (mid-range neighborhood, new complex, Tacoma, gated community) place across the road has two bedroom apartments “perfect for roommates” at $650/mo, and three for $1060. (Actual cost would be roughly 700 and 1100, assuming the worst case of everything–they’re run by the same company as ours.)

  • My dignity is unharmed by someone else having three new BMWs while I have a used minivan, or a bicycle.

  • Some want to provide everybody with a just wage. I think it should be done by government programs that could be expanded. But, first . . .

    One: Every charitable person wants everybody to earn a just wage that will allow all men (how sexist! the traditional head of the now-defunct nucular family) to support himself, his wife and children.

    Two: you probably cannot have a real-life economy where every man has a just wage. It is impossible in the real (even in the USSR, China, Cuba, Greece, Spain, Zimbabwe, etc.) world.

    Three: you may not condemn/demagogue the American, private sector because you cannot have numero One above. You cannot wage an unjust (nonviolent) war against your fellow citizens that own businesses. It is not charitable.

    Look it up. Don’t believe me. The federal government’s Internal Revenue Code has the “Earned Income Tax Credit.” It pays a negative tax (money for nothing from the government, i.e., my children and grandchildren) for a FAMILY man/person that files a tax return and has AGI below a set level. Try expanding that.

    PS: I can’t imagine that even this would be feasible in the volume needed, even without 50,000,000 more poor people coming in over the next 10 years.

  • Looks like 1910 is a funky year… it’s when they automated bread baking for the first time, so those loafs looked like now….

  • Adam Smith put it best.

    Wealth of Nations:

    By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France they are necessaries neither to men nor to women, the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.

  • Thanks for the google book tip, Blackadder. I just downloaded the book and will read soon.

    Tito, I am glad you got a chuckle out of Blackadder’s retort. Blackadder’s response even gave me a laugh.

    It would seem that what is considered a just wage would depend on different variables such as inflation , GDP per capita, and varying prices for housing, food, etc. according to the various locations.

  • A wage “sufficient to enable [a man] to support himself, his wife and his children.”

    Whatever the income necessary, every child should be a member of a family housed with decency and dignity to enable it to grow up in a happy fellowship, without want for food, or clothing, or overcrowding, or slum surroundings. And every child should have the opportunity to attend school and/or college to attain its full development. Father Ryan knew not that our secular society would sacrifice children so as not to be inconvenienced. If he had known of the heinous sacrifice of children to occur in the future, it seems to me that a “just wage” would have been deemed irrelevant to him. I think his computations might have been on the assumption that the family would be inspired by faith in God and focused on worship. He never envisioned the present breakdown of family and society.

  • RR-
    has nothing to do with your attempt to shift to GDP, or relative wealth of the nation.

    Feel free to define what you think is the abject minimum someone needs for a minimum wage job but which wasn’t needed back then.

  • I’d consider a phone a necessity today. Electricity, indoor plumbing, a refrigerator, and education through high school. Do you disagree?

  • To be most efficient, I’d add in some sort of POV– even if it’s a motorcycle with a sidecar. There’s just too many things you need a vehicle for if you have a family, and transportation opens up a much wider range of jobs.
    POSSIBLY a bicycle with a cart would work, but I’m not sure it’s feasible for buying in bulk or getting to the doctor with three kids.
    (Buying in bulk for two on foot was not possible in any affordable housing, and public transportation is often not safe for someone who would be as tempting a target as a woman with three small children and a massive load of groceries.)

    Basic medical care is required for the gov’t schools– I believe there is help for this, though I can’t remember if it’s gov’t or private.

    It might be cheaper to use a track phone rather than having a line in the house– I’ve never had a land line, let alone an incoming-and-local-only one.

    Clothing–can be gotten from Goodwill etc at very decent prices, and often you can find footwear that would be rather expensive for a good price.

  • RR,

    “I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living wa[ge] is to ensure that every man can live a life of dignity.”

    Hmm. We agree this time. There’s no point in talking about a “just wage” unless these relative factors are taken into account.

    Of course, I favor reducing dependency on wages and replacing it with various forms of income earned through direct ownership of property.

    A “wage” is the market price of labor. Instead of talking about a just “wage”, we ought to talk about a just income and how it can be acquired.

  • I can imagine the shock and incredulity on the faces of my clients if I upped my fees to provide what I think is a “just fee” for my legal services. I would see the look on their faces of course only until they vanished in search of other attorneys who could provide them with legal services at what they considered a more reasonable cost according to prevailing market conditions. The problem with the concept of a “just wage” is that unless it is simply for informational purposes or philosophical musings, it takes a huge state to enforce it. Perhaps a better path is for most people, those able to compete in the market place, to arm themselves with the education, training and work experience necessary to allow themselves to get the highest income possible for the services they provide. Private charity, and government assistance, can aid those unable to compete.

  • Fr. Ryan offered that justice required a wage floor which exceeded the earnings of 48% of the male workforce and (scribbling on the back-of-the-envelope) would have been somewhere in the range of 2/3d of the national mean of a country already quite affluent by historical standards (though befouled). Catholic Social Teaching is a work in progress…

  • Well, there ARE things we can do to make wages more likely to support a family– remove regulations that currently prevent the simple, zero-experience jobs from being done by children and the deeply disabled for a low price, control the supply of labor (not in the crazy scifi or China way, but by controlling our borders– in terms of people and goods), lower the cost of raising children by removing tax related expenses to it, make unions for only one business instead of several (as those that ‘serve’ several businesses have less worry if one goes out of business), lower the costs of business (my mom does crafting out of the house in addition to a full time job- maybe five, ten shows a year, and her profits are lower than the gov’t costs alone), reform lawsuits so they cannot be used as a source of income or a harassment tool, lower the level of government control as much as possible (local politicians have a MUCH higher level of risk if they target a local industry for cheap grace or benefit)….

    There are two ways to try to get a fair wage:
    *control everything and enforce your goal (there will still be an underground economy, unless you’re in a police state such as the world has not yet seen)
    *try to set up a situation where your goals can most easily be achieved without triggering a profit-impulse towards subverting your goals
    Basically, forced and chosen; trying to avoid a false choice, but you either get to choose to do good or you’re forced to do it, so I think I managed….

    Sadly, our current situation falls into the first one, since we’ve got minimum wage that at least meets the theory’s level of support, but that law is widely subverted (under-the-counter pay, not legally hiring babysitters and lawn-mowing teens)

    {Since we haven’t figured out a reasonable cost to live, I’m using the only number we have.}

  • LOL so we are into child labor and allowing big businesses get away with it again! Yes, that will help with the money! Child labor! Of course that will just put more money into the system making each person’s contribution that much less, just as it happened when it became two-income families! So let’s make it tougher on one-income wage earners!

  • Another factor to consider is that most families don’t have three children and that both spouses work. That may not be what Catholics want but it is a fact. Catholics also have to realize that while current standards dictate a car, phone etc., there are things we really don’t need. We need a refrigerator but we really don’t need a phone. Certainly don’t need iPods and air conditioning. Don’t need TV, cable, game systems, and many people do not need cars. Many do not need to own homes.
    There are a lot of “needs” that are ultimately wants. Even in an affluent society. And that is a Catholic perspective.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

  • That’s become a manufactured need. If we are talking about restructuring society, let’s talk about real needs. Most people don’t need to be contacted by work quickly, that’s what some may want but its not a need. Fast food workers don’t really need a phone. If the manager of the McDonalds needs a replacement he can do what people did in the past – make due with who he had and do the line work himself. That’s what happened when McDonalds first started.

  • Who said anything about restructuring society? Government or law, yes, but society is notoriously resistant to control.

  • I’m talking about restructuring what we perceive of as needs and that can happen at the personal level. I can recognize I don’t need cable, iPods and other things. Individuals can, and do, live without phones. We don’t need air conditioning to survive. We don’t need lots of things to survive. If people begin to live that way, then society will follow.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

    Father Ryan thought that telephones were an inappropriate luxury. Nowadays, of course, it’s hard to imagine life without one (even kids in Africa have cell phones).

  • Perhaps hard to imagine life without one, but possible to live life without one.

  • It’s possible to live life without indoor plumbing and electricity, just as my family did for some twenty plus years after Fr. Ryan was writing. (I actually know the exact year my mom’s family first got indoor plumbing– ’58, because they moved that year.)

    A lot of places you can’t live without air conditioning– the solutions that work when you’re in a two-room shack don’t work when you’re in an apartment complex, and heat can kill as easily as cold. (possibly easier, just less often– depends on if you mean “distance outside of the comfortable norm” or “likelihood it will kill you, on average”; a 45* rise in temp over “room temp” puts you at 120, while the same drop is 35*– which one shuts down cities?)

    Laws aside, there’s no reason a five-person family can’t live in a one-room apartment, even if current population levels mean it would have to have indoor plumbing, power and (in some or most areas) some sort of air conditioning.

  • Pingback: Inequality: Can’t Live With It, Can’t Live Without It « The American Catholic
  • Having lived in the South for years without AC as well as the Southwest for 18 without, it is possible to live without.

  • I agree that AC is a luxury, especially since I’m living without it right now. A phone is a necessity since most, if not all places of employment, need a contact number to hire you and then to get in touch with you during your employment with that company. Cell phones (even long distance land lines are not necessary) cable, and the internet are not necessities. There are community centers and libraries that have free or low-cost internet access for those who do not have internet access in their homes.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it. I’m afraid reading much of this is like hearing virgins discuss sex.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.

  • “Father Ryan thought that telephones were an inappropriate luxury.”

    My paternal grandfather also thought that. My grandmother did’t get a phone until after my grandfather’s death in 73. They also didn’t have a car, and didn’t have an indoor toilet until 68. Raising six kids on what a shoemaker could make in the Great Depression in Paris, Illinois left habits of thrift for a lifetime.

  • I think, in general, a pre-paid cell phone provides a family a greater value than the money saved by a land-line. An AC isn’t necessary in most circumstances but try telling your kid to do his homework in 120 degree weather. Possible? Yes. But the cost of bringing the temperature down to 85 for a few hours may be less than the value even the poor place on the comfort and increased productivity.

  • I’ll agree AC helps with productivity. Don’t know how people worked in offices in the summer prior to AC. Do know working outdoors in the summer heat in the South is a major drain.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.

    Hollywood?

  • Don’t know about how much they pay. I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes. That would include a lot of our Academic betters.

  • I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes.

    The reason so many people pay no income tax is because of the child tax credit. IIRC, M.Z. has several kids, and so it wouldn’t surprise me if he fell into that category. On the other hand, I’ve always found the idea of conservatives complaining that people aren’t paying enough taxes a bit unseemly, particularly given the pro-family aspect of the thing.

  • I don’t have a problem with people not having high taxes. Just pointing out that some who speak the loudest for redistribution pay little if any taxes. Kinda like virgins talking about sex.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it.

    No one is proposing that austerity be mandatory or morally required. The point is, rather, to think about how much money people have a right to demand that other people give them. Clearly if Peter is demanding that Paul give him free money, Paul has a right to think about how much money Peter really needs.

  • And needless to say, Paul isn’t obliged in any way to live at the same level of austerity that Peter does (when living on money taken from Paul).

  • JD,
    Unfortunately, I don’t think that is needless to say at all.

  • Keeping a baby in a house that’s 100+ degrees is likely to make you a family of four, one way or another, especially when the least expensive housing doesn’t have the option of a crossbreeze for cooling. Ditto for older family members, or anyone else who is not in good normal health. (Thus, why I used words like “some” and pointed out that housing now is different from housing then.) Look at the deaths from that heat wave in France a few years back, or the emergency “cooling centers” in Seattle just last week. (I wouldn’t put Seattle on a list of places that need it to live, since our dangerously hot days are limited enough that you can set everything aside to go find a public place that is cooler, it’s just a recent example of high-profile response to heat risk.)

    Phillip-
    arguments are not more or less accurate by who is offering them; it’s more than a little odd to see the traditional slam against Catholic priests talking about chastity and marriage on a site like this. If the root of someone’s argument is their own experience, then it’s about them, but there’s nothing inherently inaccurate about “virgins discussing sex.”

  • Just using MZ’s line for rhetorical effect. I actually have no problems with virgins discussing sex.

  • AC is not a luxury in Phoenix, let me tell you – old people can die without it, and even healthy people can easily succumb to heat stroke.

    Any assessment of necessities has to take in the society in which one lives – to simply exist physically at some location within a society is not enough, a person has to be able to participate to some minimal degree.

    Everyone needs a telephone, a means of transportation (even if its just a bus pass or a bike in some cases), I would say everyone needs a computer, though people without Internet could always use a public terminal. Certain appliances, electricity, plumbing, etc.

    I’m not saying it is the duty of the state to provide these things, but any discussion of “need” has to take them into account. Otherwise you’re just being silly.

  • “Don’t know how people worked in offices in the summer prior to AC.”

    I believe they had shorter hours, shut down for several days or more when it got dangerously hot, and I’m guessing, learned to have a much higher tolerance for sweat and body odor.

    “AC is not a luxury in Phoenix”

    I suspect that air conditioning is probably one of the biggest factors responsible for the economic prosperity of the Sun Belt states — that and the removal of racial segregation laws probably have done as much if not more to contribute to the economic growth of the South and Southwest as have low taxes and right to work laws.

  • Just so Elaine. People wouldn’t live there before AC and the vast majority of those that lived there prior to AC, well, lived there. But we were talking about a living wage for a husband and wife and the children they were raising. So again, they don’t really need AC even if the elderly might (or they might move to cooler climes.) I know. I lived in the Southwest without AC. Also in Southern Spain where almost nobody has AC. Hits 120 in spots during the summer.

    Agree not everyone needs a computer as those can be found in libraries. Phones used to be found throughout towns and cities. Once upon a time it took ten cents to work one and then 25 cents. If you didn’t have enough money could do something called a collect call. Those phones could easily make a comeback.

    Again, many things we want, not so much we need.

  • Pingback: Remuneration for Domestic Work of Stay-at-Home Moms (or dad?)- Let’s Go For It! « The American Catholic

The Advantage of Ideology

Thursday, July 8, AD 2010

One of the main problems with politics is that it is complicated. Take, for example, the recently passed health care bill. The bill was over 2,000 pages. I haven’t read it. Neither, I imagine, have most of our readers (indeed, it would not surprise me if no single person has read every word of the bill, though obviously each of the bill’s many provisions has been read by someone).

Of course, even if someone had read every word of the bill, this would not be sufficient to have a truly informed position on it. To have a truly informed position one would have to not only read the bill but understand it. And to do that would require a great deal of knowledge about fields as complicated and diverse as the law, medicine, political science, economics, bureaucratic management, etc.

And, mind you, even if one were somehow able to master and muster all of this information, that would only entitle one to a have a truly informed position on that one bill.

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  • I want to offer an alternative take on ideology. My starting point is the definition by the under-recognized genius of North American psychology, Silvan S. Tomkins.

    “Ideology is a tightly-woven set of ideas about things about which he can be least certain and therefore are most passionate.”

    What is the correct way to raise a child or a create a just and equal society? Are numbers discovered or invented.

    There are ideologies in all fields of human endeavor and we need to be as critical of our own ideologies as those of our opponents.

    Tomkins points out that all ideologies required faith precisely because of our inability to be certain.
    Thus there is the faith of the scientist and the Marxist, and the Christian.

    I think this approach is more fruitful and an accurate description of human affairs.

    Ideologies may be simple or complex whether of the right or the left. We are all ideologues. Pretending otherwise simply hides the rage and hate that is counter-productive to intelligent discussion and displaces them on to our ideological opponents.

    “We are rational; you are a destuctive ideologue.” This comes from both the right and the left. We need to debate critically all ideologies on their content, conservative vs liberal ideology.

    Let’s not pretend everyone of us without exception is an ideologue of a thousand ideologies about all sorts of things. We need to hold them lightly and critically lest we destroy each other with our unacknowledged and counter-productive passions, as Tocqueville has warned us.

  • Very interesting. Is there anything that can be done to get ideologues to realize the limits of their knowledge? Is there any way to get them to place their trust in people with more complex ideologies?

  • Excellent post here. I would elaborate on this further to say that, for the same reasons you find it impossible not to rely upon ideology/politics, I and others would find it impossible not to rely, at least to some extent, upon political action committees and lobbyists to advocate for the policies we favor.

    I know it’s practically de rigeur to decry the influence of lobbyists, PACs, etc. upon the political process — and don’t get me wrong, there is much that could be changed — but the bottom line is, lobbyists and PACs are simply individuals or groups who make it their full time job to track, advocate, and oppose legislation on behalf of other concerned citizens who don’t have the time, ability, or resources to do it themselves.

    Individual letters, e-mails, etc. are of course valuable, but the fact remains, if it weren’t for groups like the National Right to Life Committee, Susan B. Anthony List, state Catholic Conferences or National/State (fill in the blank) Associations writing newsletters, sending out action alerts, organizing trips to Washington or state capitals, etc. we’d have an even harder time getting our viewpoints heard. Of course, “our” lobbyists are devoted, hardworking advocates but “theirs” are merely fat cats trying to buy influence 🙂

  • I agree wholeheartedly about the limits of ideology; but I’m skeptical about your bias towards action. Why must we form an opinion about every political topic? Is articulating an uninformed and ideologically biased opinion a more valuable contribution to the common good than a simple statement that one is not informed enough to comment? It seems to me that on-line, at least, we have no shortage of the former, and that the effect is hardly salutary.

    For example, I have an antecedent bias against the current financial reform bill; this is based on my work experience with Sarbanes-Oxley, and a number of textbooks and papers I’ve read over the years that suggest to me as a general matter that Congressmen are woefully ignorant on these topics and that their actions are likely to do more harm than good.

    At the same time, I have not read the current financial reform bill or even enough secondary commentary on the bill to form an educated opinion. I am certain there is some wheat mixed with chaff (even a blind squirrel finds an acorn, etc.). For that reason, I’ve elected not to form a strong opinion about the bill one way or the other because, while I have ideological presuppositions, I lack a firm basis for their application in this circumstance. Forming an educated opinion about something is hard work. And most people have neither the time or the inclination (and sometimes the intellectual ability) to put in that hard work.

    I think your defense of ideology is fine insofar as it acknowledges a basic truth about the limits of being human; we cannot learn and think through everything, and so we must rely on ideologies and authority as shortcuts for decision-making in every day life. But I don’t see why we shouldn’t insist on ideology plus knowledge for political discourse (as opposed to every day life) – without both knowledge and ideology political discourse is, in my experience, a waste of time. I only care that my accountant can do my taxes; if he’s a 9/11 truther or has ‘questions’ about Obama’s birth certificate, that’s not really my problem as long as he does his job well. A political commentator who expresses such opinions, on the other hand, is pernicious, and I’d rather he or she either learned their facts or stopped talking. To put the point too strongly, it seems to me you’re suggesting they should just keep spewing ideological nonsense on the grounds that ideology is necessary (I agree it may be inevitable that they will keep spreading nonsense either way; I’m just not sure it’s desirable). Why shouldn’t we insist that people take the time to form educated opinions before opining?

  • How do political principles fit into the understanding of ideology you present here?

    Do you think there is such a thing as a true political principle?

  • Zach,

    A good political principle is one that is true in most, but not necessarily all, cases. One could perhaps come up with examples of political principles that were true in all cases, but I suspect they would be either overly complicated or vacuous.

  • Given the definitions here, it seems to me that probably there is a happy balance to be found between ideology and partisanship, in that based on an a set of ideological principles which hold true most of the time, one accepts the judgment of factions or individuals who also accept those principles as to how to apply those principles to individual circumstances and whether to make exceptions.

    One other though, in regards to John Henry’s point: I’d agree that it’s sometimes advisable not to sound off too much about a particular issue due to one’s lack of specific knowledge, however, I don’t think that necessarily means supporting (or not opposing) a specific measure. Though, of course, that may in turn be another ideological distinction: broadly speaking conservatives following “when in doubt, don’t change anything” approach while progressives follow a “when in doubt, redesign and regulate” approach.

  • BA,

    When I read the title of your post, I immediately completed the thought with: “…is that it lowers the transaction costs of political participation.”

    I didn’t even have to read the article because all that economics ideology did it for me. 🙂

  • Though, of course, that may in turn be another ideological distinction: broadly speaking conservatives following “when in doubt, don’t change anything” approach while progressives follow a “when in doubt, redesign and regulate” approach.

    I think that’s right. I guess my proposed ‘shut up unless you’re fully informed’ standard is open to two pretty strong critiques (and I’m sure there are others):

    1) It’s unrealistic; that’s not how people operate and it might actually hurt the level of discourse (a half-informed BA is probably better than the vast majority of partisans out there). It requires some level of sophistication for a person to even realize how uninformed they are – and those are hardly the people we want to exclude.

    2) There’s little evidence that the politicians who enact legislation meet this standard; if the people passing the laws often are guided by crude simplifications and caricatures, it’s not clear that citizens should be held to a higher standard in critiquing their votes.

  • John Henry,

    I think the issue you are raising is the issue of democracy. Throughout most of human history societies have been governed by a small elite, which in theory possessed a greater level of ability than average and could devote more time to studying the subject. Over the past few hundred years, more and more people have come around to the view that you can’t really trust a small group to act in the interest of society as a whole, and that whatever is gained in terms of increased information by those in politics is more than outweighed by the risk of self-dealing. On the other hand, most societies don’t operate via direct democracy, so there is still a sense that some level of expertise among the policy makers is advantageous, though it must be kept in check.

    If you want to decrease the role of ideology in politics, you have a couple of options. One would be to decrease your reliance on democracy. That might mean more reliance on experts or other authority figures, or it might involve a more libertarian approach, where certain questions are left up to the individual to decide for him or herself.

    The other option is education. The more educated a populace, the more sophisticated their views are likely to be. I don’t think it’s an accident that the rise of democracy and the rise of education have gone hand in hand.

  • Pingback: Round Up – August 6, 2010 « Restrained Radical

Libertarians vs. Rand Paul

Thursday, July 1, AD 2010

A couple of months back Republican Senate candidate Rand Paul stirred up a hornets’ nest of controversy when he (briefly) indicated his opposition to Title II of the Civil Rights Act of 1964, which banned racial discrimination in “public accommodations” like restaurants and hotels. The controversy was notable not only for its utterly irrelevance to any current political issue, but also for the fact that even many libertarians distanced themselves from Paul’s position. I was out of the country at the time and so didn’t get a chance to comment, but libertarian think tank the Cato Institute recently published a libertarian defense of Title II and other civil rights legislation, which got me thinking about the issue again.

Defenders of Paul’s position (and there were a few) typically made one of two arguments; one based on an appeal to principle; one based on free market economics. The first argument is the straightforwardly libertarian one that individuals have the right to dispose of their property as they see fit, and while we might not like it if a business owner refuses to serve members of a particular racial group, it is still wrong to violate his property rights by telling him he can’t do so. I don’t have much to say about this argument, except to note how incongruously unpersuasive it is to most everyone today. Libertarianism is also criticized as being absolutist, but of course there are areas in which lots of people are willing to be comparably absolutist in their defense of individual freedom. Had Paul said, for example, that he supported the right of neo-Nazis to march through the streets of Jewish neighborhoods waving swastikas, his views would have been in keeping with those of most of the intelligentsia. Yet displaying a similar solicitude when the subject involves commercial activity is viewed as borderline crankish. The reasons for this discrepancy are probably worth further reflection, but I won’t dwell on them here.

Perhaps sensing that the argument from principle is a surefire loser, others have contended that laws such as Title II weren’t really necessary to end private discrimination by businesses. According to this argument, any business that turned away a substantial number of potential customers would soon find itself out of business, and absent legal mandates segregation would simply collapse under its own weight (call it the ‘everyone’s money is the same color’ argument).

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  • A very interesting point.

  • The worst discrimination was at hotels and restaurants where white people did want to share sheets or plates with blacks or sleep or sit so close to them. I’d bet there were far fewer segregated bookstores. It’s also likely that the Civil Rights Act had a social impact beyond the four corners of the act. If you’re already eating and sleeping around blacks, walking around a bookstore with them doesn’t seem like a big deal anymore.

  • Never thought I’d support RR in most anything, but he does offer a counter-argument– one that falls right in the Libertarian blind spot. (being too rational–not a bad failing, all and all, just messes up some models)

    If the roots of segregation were irrational/emotional, then information/familiarity would be the target.

    The best way to gut-punch an emotional reaction is the social angle– so places where you go to shop and that’s all are poor choices (or good political sacrifices) to get what’s really important, the places where you go and interact.

    It’s sort of like the partial birth abortion stuff– very few pro-aborts really think it’s utterly needed, they just know they can’t give so much as an inch or folks might start to view the unborn as people.

  • I thought of RR’s counter and considered addressing it, but ultimately decided against it due to length concerns.

    With respect to RR, his explanation strikes me as being just a post hoc rationalization. Suppose you had told someone during the drafting of the Civil Rights Act, for example, that they didn’t need to include movies theaters under Title II because if you banned discrimination for restaurants and hotels it would disappear for movie theaters as well and just as quickly as if it had been included in the ban. I dare say they wouldn’t find that at all persuasive.

  • Were more transactional commercial venues like grocery stores and bookstores (of the sort not addressed in the bill) actually segregated in the first place?

  • I don’t see why it matters when debating the Civil Rights Act today, whether the breadth of the social impact was correctly assessed in 1964. My point was that the similar rates of change by businesses subject to the Act and businesses not subject to it is not a good measure of the Act’s efficacy because the nature of the businesses are different and the Act likely had a larger social impact.

  • For what it’s worth, I agree with both the principled argument and the economic one. For that reason I would not, myself, at the time, have supported the Title II of the Act.

    I don’t doubt that there is much truth to restrainedradical’s objection. But failing to torture Al Qaeda’s top guys, or failing to include improperly-gotten evidence in court trials, has possibly worse consequences for society; yet we have elected to stick to our principled “guns” on these items as well. And good for us. These are tough choices; but I think our society is better off, in the long run, for not taking sketchy shortcuts.

    But I sympathize with Paul and others who, under the current circumstances, feel unable to articulate the principled argument openly without derailing any conversation in which they are currently engaged.

    I think Blackadder (this is Blackadder’s piece, isn’t it? I hate how pieces published here have no obvious by-line!) is correct to say that the principled argument “is a surefire loser” and to note “how incongruously unpersuasive it is to most everyone today.” But I am afraid that is myopia on the part of “most everyone,” just as the notion of the moral acceptability of slavery was myopia on the part of “most everyone” in the antebellum southeast, or the acceptance of abortion or homosexual activity or artificial contraception is myopia by an awfully large number of persons today.

    So if Paul were to take the principled argument as his position, he would thereafter be able to talk about nothing else: Every conversation would be steered in that direction; every useful thing he had to say on any other subject at all would be lost in the din.

    What to do? Well, he could accept this as his lot and opt to make evangelizing the public toward accepting the principled argument his sole crusade. But who wants to waste his political life trying to convince folks that one portion of a law passed over forty years ago was morally wrong? (Talk about beating a dead horse!)

    Better to skip over the topic lightly and speak instead on topics wherein (a.) the public is more likely to listen to reason; and, (b.) the topic is of contemporary urgency, and not of merely historical interest.

  • explanation strikes me as being just a post hoc rationalization.

    Quite possible. Doesn’t mean it’s wrong, though– if we look at it with scientific terms, then the theory accurately explains the results of the experiment.

  • if we look at it with scientific terms, then the theory accurately explains the results of the experiment.

    The problem is that if there had been a difference that also could have been explained by the theory. If a theory is consistent with any result of an experiment, then the experiment cannot serve to corroborate the theory.

  • It’s possible that economic interests combined with a changing social tide would have eventually corrected the injustice but accommodating unjust discrimination by delaying justice is itself an injustice.

    As for the “principled” argument, there is no right to unjust discrimination.

  • Do we not in fact always discriminate? I am not referring to arbitrary discrimination; rather, to specific circumstances? For example, the Eucharist is reserved for baptized, confirmed Catholics and the priesthood for men only. One is a choice, the other is a physical characteristic. How is being male different than being black?

    It seems to me that the government is obliged by justice to treat all citizens equally before the law; however, it is a dangerous precedent to force private entities to do the same. Is it a moral requirement? Of course; however, when we use government to enforce that, it can become problematic.

    Based on the logic that a private restaurant MUST serve blacks, then the Catholic Church MUST ordain women if they desire to be priests, or open practitioners of Sodomy for that matter. It is a dangerous precedent and is now being used to create forced acceptance of all sorts of evils – homsexualism, cross-dressing, gender-neutrality (whatever that means), ad nauseaum.

    I was not alive when segregation was occurring and although I am not black, I suspect that the same establishments may have had some trouble serving a Levantine like myself (I do have that nappy, think black hair, after all) – nevertheless, white people I have spoken to who did reside here in Virginia back then gave it no thought. It wasn’t that they were racists (although I am sure many were, and some, sadly still are), they simply accepted the status quo. When it was brought to their attention due to the legislation and the Civil Rights struggle, they were accepting of it. It seems to be an issue of education and familiarity rather than racism. I suspect that could have been brought about without Title II.

    Furthermore, it seems that most of America was in favor of granting equal rights to blacks. It took a relatively short period from boycotts to action in the favor of justice. Then it seems the movement was stolen by lefties who found that ‘race’ was a great guilt-card to use in bringing about Communism/Marxism/Socialism. Not to mention all the money that was to be made. Notice the Tea Parties are suddenly racist and so is the entire state of Arizona – right after the country, democratically elected a half-black man as president. Come on.

    I think we can get lost in what could have happened, but we can’t fail to notice that forcing ‘justice’ on private individuals (selectivity at that – how does that even make sense?) can lead to severe problems of justice. I hope I am wrong, but it seems the sentiment of Title II and the poorly written 14th amendment can and probably will be used against the Church. Why did we open up that can of worms?

  • As for the “principled” argument, there is no right to unjust discrimination.

    Or, as they used to say, error has no rights.

  • American Knight, the reasons for the discrimination must be just. Racism is not a just reason.

    Why open up the can of justice? Because we’re Catholic. We force justice upon private individuals all the time. You can’t murder. That requires the government to define life which opens a can of worms but that doesn’t mean the government should be agnostic about murder.

  • RestrainedRadical, Blackadder:

    You fellows are correct to say that there is no right to unjust discrimination, that error has no rights.

    But in that case we’re talking about moral rights, not political rights. The former means things which under natural law we may do without thereby being immoral; the latter refers to things which the government may not rightfully use force to prevent us from doing.

    A thing may not be a moral right, but still be a political right, because the government lacks the just authority to enforce a prohibition against it. It’s wrong, but it’s not illegal.

    Error has no moral rights, but sometimes it has political rights. I have no moral right to argue in the public square that it should be legal to distribute hardcore pornography to six-year-olds, because because not only is the act itself egregiously evil, but so is the advocacy of it.

    However, I have a political right to make that argument in the public square because the government has no just authority to prohibit my political speech. Even when that speech is morally evil. (So long as it doesn’t include an immediate incitement to crime or endangerment of others; e.g., yelling “fire” in a crowded theater.)

    So the question is not whether discrimination against some customers, while serving others, has “moral rights.” It doesn’t; it’s evil.

    The question is whether discrimination against some customers, while serving others, has “political rights.” I think it does, because the government has no just authority thus to govern people’s use of private property, et cetera.

    Hence the “principled” Libertarian argument.

  • I guess I am not seeing the connection. It should be recalled that many of this enterprises had a connection with concepts in Common Law of welcoming all comers.

    There was no huge problem in the South of black folks buying cars from White Dealers

    There was a problem with people being able to eat at eateries and staying in hotels.

    Now of course a lot of this deters people to be in interstate commerce

    The whole system was upset to keep a particular social order intact. I might be able to buy a car from you or a TV from you but I can;t easily eat with you and discuss business or travel and have you at my hotel to discuss business.

    So no “market forces” would not have helped with this. In the background was a whole social system that would have come down on you if you opened up to these forces. That is what is missed.

    What is also missed is the law is a moral teacher. Once these laws came down it had the effect of making people realize that this system was indeed injust.

    When you buy a TV that does not threaten social stability. However when you have the right to break bread with a person regardless of race that does affect socialstability. The whole system was set up to make blacks inferior.

  • R.C., Cogent. Morally speaking, God wants us to choose justice, not be forced to be just. As for restrainedradical’s comment about murder, the government does not prevent murder (sadly it promotes it when the victim is an unborn child). Government prosecutes murderers, once the attempt or the accomplishment of the unjust act is executed. To R.C.’s point, if a court refuses to hear a case of say, a white poll inspector who was intimidated and threatened by say, a Black Panther who happens to be black simply because the Black Panther is black or a political ally, that is unjust racism! Since the court, or the department of justice, represents the government there is a duty to treat all citizens equally before the law.

    However, if a black restaurateur does not wish to serve Bobby Jindal simply because he’s ethnically Indian, then that is also racism and it is still unjust, but the government has no right to force the restaurant owner to be just toward Gov. Jindal. That would be up to us, often referred to as the ‘market’ to support the racist by patronizing his eatery, or to thwart the racist by not eating there. The ‘market’, or individual choice, mechanism is a far better tool for fraternal correction than the force of the government.

    jh, the system of segregation was horrible and it was openly codified in the South – the same system existed outside Beatnik culture in the North, it was simply more insidious because it wasn’t codified. I suspect most blacks still feel more welcome in the South than in the liberal North. Justice Thomas certainly thought so. Also, notice that laws on the books in the North during the antebellum period and for some time after the war, forbade blacks from working or residing in white towns and areas. Although, relegated to the horror of slavery in the South, many Southerners had closer interaction with negros than Northerners. They often ate together, their children played together and many were taught to read by their masters – principally to learn the Gospel of Jesus Christ. Does that mean it was OK for Africans to be enslaved by white Southerners? Of course not! It was also just as wrong to have them enslaved by freed blacks, or traded by Northern whites, Arabs, Portuguese, Muslims, etc. or sold by African chieftains. Out of all of those groups who was least evil to negros?

    Perhaps the Civil Rights movement would have been wholly unnecessary had we allowed the evil of slavery to be expunged from our lands by means other than war, military occupation, expanding government and dominance by an increasingly secularized WASP culture. Over 300,000 murdered black babies a year would agree if we’d let them be born. What’s worse slavery or murder? Or, segregation with traditional morals, or desegregation by decimating the black family? How does that affect social stability?

  • R.C., I’d argue that government has a moral obligation to correct injustice if it is able to do so. It may be the case that it is unable to do so. So we allow indecent speech even though the government is under no moral obligation to allow it. Arguably, employment and housing discrimination bans are too difficult to enforce but I don’t believe that was the case with restaurant and hotel discrimination in the 1960’s.

  • RestrainedRadical:

    You say: “I’d argue that government has a moral obligation to correct injustice if it is able to do so” …and then go on to consider whether, in particular instances, it is able to do so.

    But don’t you think you’ve missed a step? Or, rather, isn’t your original premise incomplete?

    Shouldn’t it be: “I’d argue that government has a moral obligation to correct injustice if it is able to do so…and if the only available means of correcting that injustice aren’t, themselves, unjust.

    For that, of course, is the source of the principled Libertarian argument in this matter.

    No Libertarian is arguing that discrimination isn’t unjust. And no Libertarian is arguing that Title II wasn’t a quick, easy (and thus “seductive” …pardon the nerdiness of the reference, but I have in mind Yoda’s homily answering Luke Skywalker’s question about whether the Dark Side of the Force was “stronger”) way to “nip discrimination in the bud.”

    The question is, “MAY we, justly, use such methods to solve our problems? Or would that constitute doing evil that good may come of it?

    The Principled Libertarian view here is that, no, despite its advantages, one may not temporarily abrogate the property rights of the citizenry in order to stop them discriminating.

    We would very much like a solution to prevent them from discriminating; however, that particular solution falls outside the set of permissible solutions; and thus, we must (with regret) reject it in favor of what may (sadly) be slower and clumsier solutions, such as encouraging markets to reward those who do business with and hire persons of all ethnicities through higher profits.

    So the point of debate is about whether Title II is whether it does, or doesn’t, cross the boundaries of what is permitted by justice. I hold that it does; but perhaps that’s something you’d dispute?

  • Yes, I dispute the idea that the state may not ban unjust discrimination. You have the right to private property but you do not have the right to do whatever you please on it. We ban murder even if it’s on your private property. Likewise, the state can ban unjust discrimination on your property. Libertarians may also point to the right to associate. But even there, you have no right to use unjust means to associate. You cannot keep individuals out through the use of murder. Likewise, you cannot keep them out through the use of unjust discrimination.

  • RestrainedRadical:

    “You have the right to private property but you do not have the right to do whatever you please on it.”

    What does it mean for something to be “my” property, exactly?

    Distinguishing again between moral rights and political rights, we know that if a particular tree is my property, I have no moral right to chop it down and carve it into an Asherah pole for pagan worship. One cannot have a moral right to do a wrong thing. But one may have a political right inasmuch as it may be a graver injustice for We The People to send our employees (the police power of the government) to imprison or kill a person for making their own tree into an Asherah pole.

    So, do political property rights permit a person to use their own property for pagan worship? I think they do.

    But notice that this does not directly injure my neighbor. (I think it does so indirectly, of course.) I therefore cannot conceive that it is just to directly use armed force against a person to compel them not to do something which directly harms no one. It is a disproportionate use of force, akin to nuking another country because one of their citizens published an anti-American op-ad. It is a violation, on a smaller and intra-national level, of the same moral obligations which, on a larger and inter-national level, are described in the Just War Doctrine.

    I can more easily conceive of something less direct; e.g., tax incentives or disincentives, or public funding for one of those treacly public awareness campaigns on television, to be used against pagan uses of property. This is a less disproportionate use of force, you see.

    I raise this principle in order to answer your objection that…

    “We ban murder even if it’s on your private property. Likewise, the state can ban unjust discrimination on your property.”

    Now, I think it’s a pretty well known principle that for something to be my property, as a political right, it means that I may do as I please with it without fear that my fellow citizens (themselves), or my fellow citizens (in the person of their employees, the government), or citizens of a foreign power (invaders) will kill me or imprison me or take my stuff over it.

    (As a moral right, property means something more; i.e., that I have been made a steward of it by God who rightfully owns everything on the grounds that He made everything, and as a steward I am obligated to use my property as He sees fit.)

    So something is not my property unless I am free to do with it what I will. But there are limitations to that, of course, and you raise one of them: Murder.

    But notice that Murder initiates violence (that is, it uses force) to take from someone something to which they already have a right (their life); and, not just a moral right, but a political right. It violates their political rights; it may therefore be criminalized through the political process. What we have here is yet another example of “my rights end where they begin to violate yours.”

    However Discrimination is in an entirely different category of act. It involves me not doing business with you, or not associating with you. But nobody has a political right to my business or my friendship. They may have a moral right, inasmuch as God wants us to love everyone. But in every case we see that in the matter of my neighbor I am more heavily obligated under the moral law than the political. (I have no moral right to gossip, but I do have a political right. I have no moral right to lust after my neighbor’s wife, but I do have a political right.)

    So then the Libertarian argument, with which I agree, is that discrimination is not a moral right, but it a political right; whereas murder is neither a moral right nor a political right.

    Moreover, in either the moral or political sphere, one may use one’s property in whatever way one sees fit (indeed, that is what is meant by calling it “one’s property,” provided one’s usage does not exceed one’s just authority by violating the rights of another.

    In the moral sphere, that means I may not use my property in a fashion that exceeds my just moral authority by violating the moral rights of another. If I do, I may be subjected to just punishment by the enforcer of the Moral Law (God).

    In the political sphere, it means that I may not use my property in a fashion that exceeds my just political authority by violating the political rights of another. If I do, I may be subjected to just punishment by the enforcer of the Political Law (the police power of the state).

    Now I said earlier that discrimination is a political right, tho’ not a moral one, whereas murder is neither. My entire argument hinges on this. If, in fact, discrimination is also not a political right, then my argument fails and yours wins.

    So the crux of the issue is this: By what principle may we distinguish between political and moral rights; and, once we have determined that principle, on which side of the line does discrimination fall?

    Once again, I think Libertarians have the correct answer here, and it stems from their observation that political rights are all about a code which is constructed and enforced by government. But what is “government?”

    Well, government is that organization in society to which we (uniquely) grant authority to use force to achieve its ends. Honda Motors may not compel me at gunpoint to buy their cars; the Lions’ Club or Rotary Club may not compel me at gunpoint to perform community charitable works; but government can compel me at gunpoint to obey its laws. The “force-wielding organization”: That is what government is.

    Because government’s identity is bound up with the use of force, it follows naturally that the rights and obligations within its sphere of just authority are also those of force. The government may criminalize murder because in murder, the attacker initiates unjust force against another. That the government replies to this use of force is obviously fitting, just as a nation’s armed response to an armed invasion is fitting.

    Government may also criminalize fraud, which is trickier, but not overly so, because fraud is intellectual force. If I buy your product because you put a gun to my head, I have done something I would not otherwise have done: You forced me. Likewise, if I buy your product because you have lied to me about what it is and does, I have done something I would not otherwise have done: You forced me.

    But you’ll notice that the forcing is slightly less direct with respect to fraud, than with respect to holding a gun on me. Therefore, the jail times associated with fraud are less than those associated with threatening my life.

    Now the Libertarian observation about Discrimination as opposed to Murder is this: Discrimination withholds activity whereas Murder acts forcibly, violently.

    It is therefore within the political competence of government, the organization which uses force to achieve its ends, to prevent and/or prosecute murder. But no use of force exists in the matter of withheld business or withheld friendship motivated by discrimination. Therefore this immoral act falls outside the competence and authority of government. A person has a moral right not to be discriminated against, but not a political right.

    Put another way: If Tom, Dick, and Harry live near one another and Tom observes Dick in the act of robbing Harry at gunpoint, Tom may morally intervene with force to stop this immoral act (indeed, if he knows his intervention is very likely to safely succeed, his intervention becomes morally obligatory). But if Tom observes Dick shunning Harry and knows that Dick is doing so because Harry is black (it’s apparently not for nothing the offender is named “Dick”), does Tom then have just moral authority to whip out a gun, point it at Dick, and say, “Go be friends with Harry?”

    I don’t think so. It’s disproportionate. It’s an Unjust War writ small. Tom has no just authority to do any such thing.

    But, if Tom has no such just authority, then he can’t delegate that authority to any of his employees…which includes the government.

    How, then, could the government be delegated such authority justly, if their employers (who’re doing the delegating) never had that just authority to begin with? Answer: They couldn’t.

    Thus discrimination in the form of withheld business or friendship is outside the political sphere of authority, whereas murder and other forms of force and fraud fall well within it.

  • In addition to RC’s excellent points, I would add that what counts as “unjust discrimination” is whatever progressives say.

    Churches in Europe and North America face constant threats and lawsuits from homosexual groups for not indulging their requests to use their property, or for even preaching that homosexual behavior is a sin. This is regard as “hate”, when of course, in reality, no one has more hatred in their hearts than radical homosexual activists do for the Church.

    It may even be “unjust discrimination” not to provide transgendered bathrooms in the future, or to make all sorts of additional accommodations to body-mutilators, transvestites, etc. Where does this madness end?

  • R.C., you have the moral right to worship according to your conscience, even if it is ill-formed, so long as it does not violate the rights of others. So you have the moral right (and therefore, necessarily, the political right) to create idols for pagan worship if your conscience allows it and the law allows individuals to chop down trees.

    Government can choose to allow unjust discrimination or prostitution or indecency but it does so out of concern for the common good not because there’s some political right archetype that must be obeyed even when contrary to the common good.

    Even if we accept the normative libertarian premise that government should not penalize victimless wrongs, unjust discrimination is hardly victimless. It does violence to the dignity of man as surely as defamation, assault, or murder.

    In your “Tom, Dick, and Harry” hypo, if Dick robs Harry, you don’t have the authority to lock Dick in your basement for five years. Governments have legitimate powers that individuals do not. Separate from that is the issue of proportionality. Government may not justly execute you for discriminating unjustly but it can prevent you from operating a restaurant.

I Give Up, Here's a Links Round-up

Friday, June 18, AD 2010

“The Vatican” endorses the Blues Brothers.

North Korea embraces neoliberalism (baby steps).

Matt Yglesias is my kind of liberal.

The Onion channels Bertolt Brecht.

Israel further loosens border restrictions with Gaza.

A lot of people seems to think this is good news for Afghanistan. Have they never heard of the resource curse?

The menace of friendship. Paging Eve Tushnet.

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