I was provoked by Tito’s recent post with a great cartoon on the economy. Like him I am greatly concerned about where the U.S. Dollar, our economy and country are headed. This post is related to an earlier post that Christopher Blosser and I co-posted on the Austrian School of Economics. Let me state from the beginning that I am neither an economist nor a certified financial planner. My opinions are worth the value of the cyber ink you are now viewing. It seems clear to me though that our economy is heading into a double-dip recession and possible depression, which is actually calling it what it is. I don’t see how the current policies and actions of the Treasury Department and Federal Reserve are helping the common man. The rate of interest for savings is so minimal now and for the foreseeable future that it can be compared to the sand under the ocean, not the raft-boat on top of the waves. Therefore what can we do to not lose and potentially grow our savings?
Next week, New Hampshire Republicans, and probably some irritating Democrats, will decide who the Republican Nominee is for the Republican New Hampshire Senate Candidacy. It appears to the best of my knowledge that Ovide Lamontange is the only consistent pro-life and limited government candidate on the ticket. I urge anyone you know who lives in New Hampshire to vote for Ovide. No, he’s not a genius, but he’s principled, more than the others. Primaries should be about principles. Playing Machiavelli can wait until November. We have to choose the right people to put up for office, and the right people are principled people who think that government is more than simply another way to stimulate the economy. We have a debased and corrupt form of politics that only recognizes the material dimension of our lives. We need candidates who understand that material life is not the only good, and that material well-being is in some way really dependent on our spiritual well-being. Our spiritual well-being is in a real way determined by our laws, and our politicians create our laws, not just “our jobs” (which is ridiculous, politicians don’t create jobs). We need to look for politicians who have but an inkling of an understanding of this countercultural idea. Our laws are not just about money; they are about truth and justice and goodness and even beauty.
Republicans are upset about not being in power. Republicans are not in power because they have failed to live up to their principles, and everyone knows it. Republican principles are good principles, and we should not concede them because we have hopes of winning an election. Republicans have won elections, and they have acted frivolously and ignorantly with their power because they were not principled. We need to elect politicians who will behave responsibly with their power, and not just win the election. Elections don’t matter; justice and truth do.
President Barack Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to write off 100% of their new investment in plant and equipment through 2011, a plan that White House economists say would cut business taxes by nearly $200 billion over two years.
The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways. But unlike those two ideas, both familiar from Mr. Obama’s 2008 campaign, the investment incentive would embrace a long-held wish by conservative economists that had never won support from either Republican or Democratic administrations.
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My former co-blogger Morning’s Minion recently attacked the idea of extending the so-called Bush tax cuts to individuals earning more than $250,000 a year:
It would cost $680 billion dollars over 10 year. This is far greater than the cost of extending unemployment benefits to those out of work, something the Republicans opposed vigorously (the unemployed do not fill their coffers). It gets worse. Nearly all of the benefit goes to the richest 1 percent, those making more than $500,000 a year. Even more than this, 55 percent of the benefit goes to a mere 120,000 people – the top one-tenth of 1 percent of all taxpayers. Doing the math, that comes to an average $3 million tax reduction to those lucky enough to sit at the helm of the income distribution. It is indeed the preferential option for the super rich. This would be troublesome at the best of times, but in the current economic climate when so many struggle to get by, it’s simply immoral.
I can see where Minion is coming from on this, but it seems to me that his position here (aside from being contrary to the views of most economists) is contrary to other things he’s written on the desirability of fiscal stimulus.
The “means of production” (which may be defined, roughly, as consisting of capital goods minus human and financial capital), is a central concept in Marxism, as well as in other ideologies such as Distributism. The problems of capitalism, according to both Marxists and Distributists, arise from the fact that ownership of the means of production is concentrated in the hands of the few. Marxists propose to remedy these problems by having the means of production be collectively owned. Distributists want to retain private ownership, but to break the means of production up (where practicable) into smaller parts so that everyone will have a piece (if you wanted to describe the difference between the Marxist and Distributist solutions here, it would be that Distributists want everyone to own part of the means of production, whereas Marxists want everyone to be part owner of all of it).
Where a society’s economy is based primarily on agriculture or manufacture, thinking in terms of the means of production makes some sense. In an agricultural economy wealth is based primarily on ownership of land, and in a manufacturing economy ownership of things like factories and machinery plays an analogous role. In a modern service-based economy, by contrast, wealth is based largely on human capital (the possession of knowledge and skills). As Pope John Paul II notes in Centesimus Annus, “[i]n our time, in particular, there exists another form of ownership which is becoming no less important than land: the possession of know-how, technology and skill. The wealth of the industrialized nations is based much more on this kind of ownership than on natural resources.”
Consistent life ethic proponents have long argued that the pro-life movement must view a wide variety of issues within the pro-life filter; that is, it can be a pro-life vote to help the poor and working class just as it can be a pro-life vote to overturn Roe v. Wade (although it is not necessarily given the same weight).
An example of this is Planned Parenthood’s recent expansion in Michigan. The nation’s largest abortion business will add another clinic in the state, this time in Oakland County, within the next two years. This clinic will offer a range of abortion services. What’s curious is the rational for opening a new clinic in one of the worst economies in years.
“Over the last couple of years, we’ve been getting calls that go, ‘I’m pregnant, we don’t have health insurance, my husband isn’t working and we can’t afford another child.’ These calls have become routine for us,” says Lori Lamerand, executive director of Planned Parenthood of Mid and South Michigan.
To follow up on my first installment of “Set Me Free (From Ideologies), I am going to draw again from the rich well of Pope Benedict’s powerful encyclical Caritas In Veritate. In this case it would seem that in paragraph #25 the Pope is sounding kinda liberal if we would attempt to fit the views expressed into one or another of our American political ideologies. Read the rest of this entry »
In my brief life on earth I have not experienced such high unemployment amongst my family and friends this year than ever before. As each week passes I hear of another friend or acquaintance who has lost his or her job.
This is the worst recession I have seen and I don’t see any signs that it will let up for the next 9-12 months. So I find it appropriate that a simple request to all our readers to make time this evening prior to going to bed and include those that are unemployed, especially those with families and dependents in your prayers.
With extra time on our hands the unemployed can remain steadfastly busy by working on their faith through prayer and service. For when work does come around there will not be time for such activities.
The following prayer is a traditional Catholic prayer that I have used from time to time due to the nature of my work of being an independent contractor and one that helps to put life in proper perspective and order:
Dear Lord Jesus Christ,
You wanted all who are weary
To come to You for support.
Lord, I am worn out
By my inability to find work.
Guide my steps to a righteous path;
Give me the patience
To find opportunities with a future.
Calm my worries and fears
As my financial responsibilities mount.
Strengthen my resolve;
Embolden my heart to open doors;
Open my eyes to see life beyond rejections.
Help me believe in me.
Let me realize other ways
To bring about Your kingdom on earth.
Let me grow as a person
That I may be worthy
For Your greater glory.
In the name of the Father, Son, and Holy Spirit,
Saint Joseph has been especially helpful for me and I strongly recommend him for those seeking employment:
Dear Saint Joseph, you were yourself once faced with the responsibility of providing the necessities of life for Jesus and Mary. Look down with fatherly compassion upon me in my anxiety over my present inability to support my family. Please help me to find gainful employment very soon, so that this heavy burden of concern will be lifted from my heart and that I am soon able to provide for those whom God has entrusted to my care. Help us to guard against bitterness and discouragement, so that we may emerge from this trial spiritually enriched and with even greater blessings from God.
In recent years Halloween has gone from a primarily child-oriented holiday to an occasion of commercial importance comparable to Christmas or Easter. National retail sales figures indicate that Halloween is the 6th biggest holiday for retailers — behind Christmas, Valentine’s Day, Easter, Mother’s Day and Father’s Day — and rapidly gaining ground, particularly among young adults.
The trend has now sparked a movement of sorts — led by the Spirit Halloween retail chain — to move Halloween permanently to the last Saturday in October. Their online petition at this link (http://www.spirithalloweekend.com/ ) asks Congress to lend its official endorsement to the change, although that would not be strictly necessary since Halloween is not a federal or national holiday.
During these dismal economic days, we can always rely upon the comic stylings of Joe Biden to raise our morale, just as the American public during Depression I looked to the Three Stooges for comic relief. I assume Jolly Joe in the above video was thinking of the old Reagan line from Reagan’s 1980 campaign for President: “A Recession is when your neighbor loses his job. A Depression is when you lose your job. A Recovery is when Jimmy Carter loses his!” Needless to say, the brighter lights in the Administration were reaching for extra strength pain relief as they saw the human gaffe machine use the “D” word, especially since they have been attempting to convince a sceptical public that the recession is ending.
What makes this especially hilarious is that Newsweek, the unofficial house organ of the Obama administration, ran a puff piece on Biden last week entitled “Why Joe is No Joke” . Hint Joe, when you are a politician and one of the most sycophanic press journals on your side runs a story arguing that you are not a joke, that is most definitely not a good sign. Read the rest of this entry »
At the request of my friend and fellow contributor to The American Catholic, Darwin Catholic, I will elaborate more on some of the general points I introduced to the discussion over his latest post about economic morality. For those who did not follow the exchange (of me versus everyone, understandable on this somewhat more conservative blog), I questioned the accuracy of any scientific theory of economics that did not take into account class conflict (or, as some insist on saying, “class struggle”). Darwin and others responded by questioning the validity of the very category of class. Hence, we have a great deal of ground to cover – I hope you will bear with me, and that we all end up learning something.
After a few delays, Pope Benedict’s long-awaited third encyclical on economic and social issues is set to be signed tomorrow, June 29, and released to the public on July 6 or 7, according to Catholic News Agency.
We here at American Catholic have had our share of lively debates over the meaning and application of Catholic social doctrine. I anticipate that they will continue following the release of this encyclical. This is a historical event of great importance to Catholics all over the world. Like some of his predecessors, and particularly Pius XI, Pope Benedict will be addressing the world on social and economic matters in the midst of a world wide economic crisis.
It was the crisis itself that reportedly caused the delay in the completion of the encyclical, and as it would be reasonable to assume, it is now clear that much of it will deal directly with the breakdown of the financial system in particular, and with the phenomenon of globalization in general.
President Obama gave a speech today on the economy and the agenda of his Administration and Congress, thus far into his presidency. I personally watched the speech. I have yet to go back and read it. I thought it might generate some good discussion, in collective analysis of the text. In the spirit of Easter, please engage with criticisms of his positions, not of his person or broad generalizations that are not necessary or charitable.
It has now been twelve weeks since my administration began. And I think even our critics would agree that at the very least, we’ve been busy. In just under three months, we have responded to an extraordinary set of economic challenges with extraordinary action – action that has been unprecedented in both its scale and its speed.
I know that some have accused us of taking on too much at once. Others believe we haven’t done enough. And many Americans are simply wondering how all of our different programs and policies fit together in a single, overarching strategy that will move this economy from recession to recovery and ultimately to prosperity.
So today, I want to step back for a moment and explain our strategy as clearly as I can. I want to talk about what we’ve done, why we’ve done it, and what we have left to do. I want to update you on the progress we’ve made, and be honest about the pitfalls that may lie ahead.
A look at the federal budget since 2000, with projections, for what little they are worth, by the White House and the Congressional Budget Office to 2019. By CBO estimates last week, the budget deficits between now and 2019 would total $9, 300, 000, 000, 000.00. The entire cost of WW2 for the US in 2008 dollars was 3.6 trillion. This year the budget deficit will total 13% of our gross domestic product. This isn’t economic policy, it is lunacy. These type of deficits are completely unsustainable, and we are running towards national bankruptcy. It is impossible to borrow these type of funds from abroad. We will simply create the funds out of thin air. The long term impact on our children and their children can be easily imagined. As the Heritage Foundation points out, this is a completely bi-partisan disaster. Politicians have acted like teen-agers with stolen credit cards for far too long. However, this will stop. It will stop either by voters throwing out of office the fiscally irresponsible, or, much more likely in my estimation, the economy will simply hit a brick wall. This will not, cannot, go on. How it is stopped is up to us.
Update I: The President of the EU slams current US economic policy as a road to hell. I never thought I would live to see the day when a President of the EU would have more economic sense than a President of the US.
“Bond prices fell after the auction of $34 billion in 5-year Treasury notes. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.77 percent from 2.71 percent late Tuesday. The yield on the three-month T-bill rose to 0.19 percent from 0.17 percent Tuesday.
Investors gave an unexpectedly cool response to the note sale just a day after a $40 billion auction of 2-year notes suggested strong demand. The government is running up huge deficits in order to fund an array of plans to provide stimulus to the economy and support to the ailing financial system. Any suggestion that demand for U.S. government debt is weakening is a negative for stocks, simply because Wall Street has been relying so heavily on the government’s rescue plans.
The surge of worry over the debt auction wiped out the market’s early optimism in response to durable goods and home sales data.”
As Glenn Reynolds at Instapundit notes here, since the passage of the Bankrupt the Nation Act of 2009, erroneously referred to as the Stimulus Bill, the Dow has lost over 1400 points. Since the election of President Obama, the Dow has lost over 2700 points as detailed here. However, in the midst of the greatest Bear market in a generation, our President has financial advice for us: Buy stocks!
Critics of the Bush Administration often complained (especially during his first term) that Bush used 9/11 as a justification for nearly everything he did. Given that the country was widely supportive of the administration in the years right after the attack, this was (the complaint went) a way for Bush to do things he’d wanted to do anyway under the guise of responding to an emergency. While I think this complaint was overstated, there is an element of truth to it. For instance, I don’t think there’s a whole lot of question that many within the administration (rightly or wrongly) wanted to get rid of the Baathist regime in Iraq even prior to taking office.
In this respect, Obama seems to have found his 9/11, his excuse for doing all the things he and his party want to do while assuring everyone it would be a Very Bad Idea it not Downright Unpatriotic for them to disagree. Obama’s 9/11 is the recession, or as the media seems to have named it “The Worst Economic Downturn Since the Great Depression”. (This is, to my mind, a rather unwieldy name. Perhaps we could just call it the “Big Recession” or the “Little Depression”?)
Thus, in his presentation of a new budget which is heavy on partisan measures (big tax increases on “the rich” and preparation for major changes in social service structure and spending) and racks up the largest deficit (as percentage of GDP) since 1942, Obama assured people that this was necessary in order to restore the economy:
It’s really not clear what the plan means; there’s an interpretation that makes it not too bad, but it’s not clear if that’s the right interpretation….So what is the plan? I really don’t know, at least based on what we’ve seen today. But maybe, maybe, it’s a Trojan horse that smuggles the right policy into place.
Not exactly an enthusiastic endorsement. Today’s Washington Post has some of the back story:
Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.
A month into the Obama administration, who could it be that left-wing firebrand economist and New York Times columnist Paul Krugman is denouncing? Is it the dividers? Is is the extremists? Is it the old way of politics?
Has anyone ever wondered if it is possible that one can land in a financial crisis when one has a steady income, no debts, and a large reserve of money in case of emergencies? Certainly, I suppose, if something devastating comes around, like an accident that requires weeks in the ICU, surgeries, and a long rehabilitation, that could bankrupt a person. Yet such accidents, on a whole, are rare, and most people who live a financially responsible life never have to plead for a bailout.
When we look at our current financial crisis nationwide, I can’t help but wonder what people are thinking. President Obama has promised us trillion dollar deficits for years to come in an effort to restore our economy. Like most right-leaning folk, I’m under the impression that our current crisis has come from overspending, living beyond our means, and not being prepared for when we hit bumpy times in the economy (like $4/gallon gas, which drives prices up all around). Perhaps, if this view is incorrect, someone will be willing to explain to me why it is so. But my impression has been that first, people individually are consumed with buying, buying, buying, even when they don’t have the money to buy. I have friends who, though they grossed over $60,000 a year, were still living paycheck to paycheck because of their deficit spending. I’ve seen people who, upon receiving their government money, have gone and blown it on new cell phones (that are shut down after two delinquent months), on fancy steack dinners, and so on, instead of buying necessities or saving up what they can. I’ve seen people struggling with hundreds of thousands of dollars of accumulated debt that came from student loans, house loans, car loans, credit cards, and so on. This is just what I’ve seen. What I’ve heard–word of mouth, or in the news, or on blogs–is even worse.
The market reacts to the bank bailout plan: