Wintery Knight

…integrating Christian faith and knowledge in the public square

Does the free market work to reduce poverty?

Economist Walter Williams

Economist Walter Williams

From Investors Business Daily.

Excerpt:

There has never been a purely free market economic system, just as there has never been a purely communist system. However, we can rank economies and see whether ones that are closer to the free market end of the economic spectrum are better than ones that are closer to the communist end.

Let’s try it.

First, list countries according to whether they are closer to the free market or the communist end of the economic spectrum. Then rank countries according to per capita gross domestic product. Finally, rank countries according to Freedom House’s “Freedom in the World” report.

People who live in countries closer to the free market end of the economic spectrum have far greater income than people who live in countries toward the communist end — and enjoy far greater human rights protection.

According to the 2012 “Economic Freedom of the World” report by James Gwartney, Robert Lawson and Joshua Hall, nations ranking in the top quartile with regard to economic freedom had average per capita GDP of $37,691 in 2010 compared with $5,188 for those in the bottom quartile.

In the freest nations, the average income of the poorest 10% of their populations was $11,382. In the least free nations, it was $1,209.

Remarkably, the average income of the poorest 10% in the economically freer nations is more than twice the average of those in the least free nations.

Free market benefits aren’t only measured in dollars and cents.

Life expectancy is 79.5 years in the freest nations and 61.6 years in the least free.

Political and civil liberties are considerably greater in the economically free nations than in unfree nations.

Leftists might argue that the free market doesn’t help the poor. That argument can’t even pass the smell test.

Imagine that you are an unborn spirit and God condemned you to a life of poverty but gave you a choice of the country in which to be poor. Which country would you choose?

To help with your choice, here are facts provided by Robert Rector and Rachel Sheffield in their report “Understanding Poverty in the United States: Surprising Facts About America’s Poor.”

  • Eighty percent of American poor households have air conditioning.
  • Nearly three-fourths have a car or truck, and 31% have two or more.
  • Almost two-thirds have cable or satellite TV.
  • Half have one or more computers.
  • Forty-two percent own their homes.
  • The average poor American has more living space than the typical non-poor person in Sweden, France and the U.K. Ninety-six percent of poor parents stated that their children were never hungry; in other words, they could afford food.

The bottom line is that there is little or no material poverty in the U.S.

At the time of our nation’s birth, we were poor, but we established an institutional structure of free markets and limited government and became rich.

This might be a good article send along to people who want to bash our free-market system. It’s easy for them to make assertions that we have to do this or that policy to redistribute wealth. But the real solution to helping the poor is not to take from one and give to another, it’s to put into place a system that causes wealth to be created for all. That’s what happened in the United States, and you can see how it happened in other capitalist economies like Chile, Hong Kong and Singapore. Capitalism turns poor nations into rich nations.

Filed under: Commentary, , , , , , , ,

Dennis Prager: why the left doesn’t care about bad economic news

This was posted last night on Investors Business Daily.

Excerpt:

Almost everywhere the left is in control — in California, for example — the economic news is awful. But this has no effect on the ruling Democrats, the Los Angeles Times editorial page, New York Times economics columnist Paul Krugman or others on the left.

There is one overriding philosophical reason and one political reason for this.

He lists a number of the economic problems in California – a state that is controlled top to bottom by Democrats.

Why doesn’t it bother Democrats that economies decline when they are in control?

He writes:

Why do these state-crushing economic statistics — nearly every one of which is the result of left-wing policies — have no effect on California’s Democrats, the Los Angeles Times editorial page, New York Times economics columnist Paul Krugman or almost anyone else on the left?

The answer is that they don’t care.

Yes, of course, as individuals with a heart, most people, right and left, care about people losing their jobs.

But in terms of what matters to the left and the policies they pursue, they don’t care. The left and the political party it controls do not care if their policies force companies to leave the state (or the country).

They don’t care about the coming high inflation caused by quantitative easing (printing money) — Krugman calls it the inflation obsession — or the job-depressing effects of high taxes or energy prices that hurt the middle class or compelling businesses to leave.

They don’t care because the left is not interested in prosperity; the left is interested in inequality and in the environment.

Furthermore, the worse the economic situation, the more voters are likely to vote Democrat. The worse the economic situation, the greater the number of people receiving government assistance; the greater the number of people receiving government assistance, the greater the number of people who will vote Democrat.

Therefore, both philosophically and politically, the left has no reason to be troubled by bad economic news. And it isn’t. It is troubled by inequality and carbon emissions.

He could have done the same analysis in Detroit, where Democrats govern unopposed by Republicans, and have for years.

The main problem of the left is “inequality”. If they put in place policies that make everyone earn minimum wage, regardless of what they do, that would be a great victory for them. If the price of prosperity is “economic inequality”, then so much the worse for prosperity. If you tax people who produce more value than a minimum wage worker so that they make the same as a minimum wage worker, you can forget about the kinds of businesses that produce cars, computers and appliances. People invent these things and start businesses in order to make a profit. That’s why they spend their savings and take the risk to start a business. But if everything they earn is taxed away, then we will have to do without new products and services. This is understood in the private sector, but not by the government, nor by the low-information voters who vote for bigger government.

We have to stop allowing the Left to pain themselves as saints because they talk about the poor. What they don’t like about the poor is the rich. If everyone were poor, they wouldn’t talk about the poor – because everyone would be equal. That’s their goal.

Filed under: Commentary, , , , , , , , ,

My disagreements with a trendy, hip pastor on missions and witnessing

So I am visiting my parents and my pet bird today in the city I grew up in, and I went to church as usual. The church in my hometown just got a new senior pastor who is one of those hip, trendy pastors. So far, my friends and I who attend this church have some concerns about him.

So the pastor two points in this sermon today: 1) we should be concerned with world missions and 2) we should be “witnessing” in non-cognitive ways. You’ll see what he means by these in a minute.

Missions

Now to be fair to the pastor, I don’t really know his full philosophy on missions. He was giving a sermon, and he had time for one example. His example of missions was that “wealthy” Christians in the West should give money to groups like World Vision that provide for the immediate physical needs of poor people in other countries. So his target for evangelism is not a wealthy Western professional who lives next door to him and isn’t impressed with food. His target for evangelism is someone who is starving in another country, who is at a disadvantage when it comes to education and poverty. And his preferred missionary is not someone who has studied to know how to persuade using knowledge, it’s someone nice and kind who is bringing food to starving people and then presenting the gospel to them through an interpreter as they eat the food.

Witnessing

The example the pastor gave for witnessing to non-Christians was to pray with them. He said that there would be less room for “hate” (his actual word) if Christians spent more time praying with non-Christians. The first thing I thought of when he said this was Mormon missionaries establishing the truth of their religion with people by praying for a “burning in the bosom”. Regarding his mention of “hate”, he didn’t mention gay marriage specifically, but I think that is the most reasonable context for the word “hate” in this culture. If we prayed with people and started caring for them and being nice to them (no mention of sin and repentance, note), then our “hate” for them would decrease.

So I want to make some basic points about what was said and what was left out.

Truth

At no point in this sermon or any any other sermon I have seen delivered by this pastor has the issue of how we know truth, or how we demonstrate that something is true, ever been addressed. I have not ever heard this pastor give a sermon on how he knows that God exists, how he knows that the Bible is reliable, and how he knows who Jesus is.

Persuasion

I was very careful today to pay attention to how the pastor was getting the audience on board with what he is saying. And I think I’ve hit on his method of persuading. It’s not to make arguments and to supply evidence, or even to quote the Bible in context. He relied a lot on hipness and emotional resonance with his audience. I think he expects us to accept what he is saying because he is able to 1) share illustrations from his life experiences (farming, this time), or 2) name rock bands like “Cold Play”. So his approach is more like “I’m just like you, so you should believe what I’m telling you”.

Evangelism

His two strategies for evangelism above seemed to be 1) giving money to Christian groups who can then travel to other countries to discuss Christianity with people who are receiving gifts from them and 2) offering to pray with non-Christians. I do not think that merely expressing theological opinions and then handing someone food or clothing is a good strategy for evangelism. I think it is permissible, it’s just not the way I see it being done in the Bible. I realize that there are going to be cases where someone accepts Jesus on the basis of this sort of evangelism, and in the best case, they might even go on to become a great Christian scholar who understands the truth of these matters so well that they can present it to non-Christians with authority. That would be the ideal case. But I think when I read the New Testament, the appeal to non-Christians in evangelism is an appeal to truth, based on the historical event of the resurrection, for example. I asked a friend of mine who knows the Bible well, about whether giving charity to people is ever a method of evangelism, and he said he couldn’t think of any. His preference for this evangelism-by-charity makes me wonder about people who have non-Christians living right next to them in the West, or even in secular Europe, who nevertheless choose to go to places where they can use the leverage of financial goods to get into conversations with people about spiritual things. It’s easy to go to a foreign country and talk to someone uneducated who can’t challenge you because they want the food you brought. It’s harder to evangelize your neighbor who is an atheist and a medical doctor – you would have to read books, and demonstrate the truth of things. Maybe that’s why so many people prefer the former to the latter – it’s easier.

His second method of evangelism (praying with non-Christians) seems to me to be impractical. It seems to me that it would work on people who do not have questions, and who are looking to decide theological / spiritual claims by their emotions. Prayer is not able to establish the historical fact of the resurrection in a debate situation, for example. You should pray before and after making a case for the resurrection, but you should at least know how to make the case for the resurrection to a non-Christian. Again, I am not familiar with a case in the New Testament in which a non-Christian, non-theist was ever approached with prayer alone. I know that Paul reasons from the Scriptures with people (Acts 16-17), and Peter appeals to the resurrection (Acts 2). His approach is more like what Mormons do, because they can’t demonstrate truth using arguments and facts. If this guy can only use Mormon techniques, that’s disturbing – like he has reduced Christianity to a flavor of ice cream that you either like or not, depending on your feelings or whether people are nice to you. Prayer is not used to demonstrate the truth of anything in any other context in real-life. Why is he trying to use it with Christianity? Is Christianity not the same as any other area of knowledge?

Economics

Now, I sense that this pastor has a concern for the poor, and I agree with him that charity is Biblical, and even that we can give money to big organizations like World Vision to help the poor in other countries, (although I don’t like World Vision). But I think where I get annoyed is that this is his only stated method of helping the poor. But I prefer a different method of helping the poor, namely the method that you see in countries like Hong Kong or Chile. That method is free market capitalism. And all you need to do to push that method is to sit with an economics book, learn what policies drive economic growth, and then push them in the public square. I’m being frank here. I think it can be demonstrated that foreign aid, for example, accomplishes little or nothing to help the poor, and often hurts the poor. What we need to do is to trade with these countries, promote economic growth in these countries, in the same sustainable, organic way that growth occurred in countries like Hong Kong and Chile. But what I get from this pastor is a kind of naive “Michael Moore” anti-corporation vibe. I think I can say without being proved wrong that we will never here any presentation from him that addresses the need to learn economics in order to promote the policies that will drive organic, sustainable economic growth in these counties, (e.g. – micro-loans, free trade, etc.). I do think it’s important to give to charity, though.

Advice for this pastor

If he read this post, then my advice to this pastor would be to take a two-pronged approach. If his concern is evangelism, then I recommend that he speak to some non-Christians in this country, and then when he sees that they have questions about God’s existence, gay marriage, the resurrection, abortion, sexual ethics, religious pluralism, miracles, evolution, creation, the reliability of the NT documents, etc., then he can do something different than Mormons do - he can embrace apologetics. Then he will be able to do missionary work right here in the West, with the educated professionals that God providentially placed right next door to him and right next door to his flock, too. Also, instead of worrying about how much we “hate” others, maybe he can offer Christians some advice on how to explain and defend religious liberty, which is under attack from the very groups he implies, in my opinion, that we are “hating” Also, it might be good for him to bash McDonald’s chicken nuggets less, and to defend the unborn more, in his sermons.

Second, if his other concern is to help the poor, then I recommend that he focus on promoting economic growth and individual charity. I think the big problem I have with this guy is that everything he says is so childish and simplistic. I agree we should want to help the poor, and that we should be charitable. But I think that when you are talking about poverty in other countries, then we should do everything possible. And everything possible certainly includes becoming educated about economics and the policies that are known to lift poor nations out of poverty. This is what people who are really interested in solving the problem would focus on. If you’re going to talk about poverty, then talk about it based on knowledge. Don’t leave it at a kindergarten level.

Filed under: News, , , , , , , , , , , , , , ,

Jay Richards: How to end poverty in 10 tough steps

I saw that Stand to Reason’s Amy Hall blogged about a new lecture by Jay Richards, a Christian expert in economics. Amy linked to this post by Justin Taylor which summarizes the talk (above).

Summary:

  1. Establish and maintain the rule of law.
  2. Focus the jurisdiction of government on maintaining the rule of law, and limit its jurisdiction over the economy and the institutions of civil society.
  3. Implement a formal property system with consistent and accessible means for securing a clear title to property one owns.
  4. Encourage economic freedom: Allow people to trade goods and services unencumbered by tariffs, subsidies, price controls, undue regulation, and restrictive immigration policies.
  5. Encourage stable families and other important private institutions that mediate between the individual and the state.
  6. Encourage belief in the truth that the universe is purposeful and makes sense.
  7. Encourage the right cultural mores—orientation to the future and the belief that progress but not utopia is possible in this life; willingness to save and delay gratification; willingness to risk, to respect the rights and property of others, to be diligent, to be thrifty.
  8. Instill a proper understanding of the nature of wealth and poverty—that wealth is created, that free trade is win-win, that risk is essential to enterprise, that trade-offs are unavoidable, that the success of others need not come at your expense, and that you can pursue legitimate self-interest and the common good at the same time.
  9. Focus on your comparative advantage rather than protecting what used to be your competitive advantage.
  10. Work hard.

I’m currently working my way through Money, Greed and God with a friend, and we are going through it chapter by chapter. If you don’t have the book, it’s a perfect introduction to economics and how it relates to the Christian worldview. I always encourage Christians to move beyond good intentions to good results by studying economics. We are supposed to be helping the poor, but how should we do it? Economics is the science that allows us to understand which policies we should support to do that.

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New study: the effects of declining marriage rates and lower salaries for men

First, let’s remember that Obama’s massive trillion dollar stimulus program was designed to help women, not men, even though men had a higher unemployment rate than women when it was enacted.

Christina Hoff Sommers explained it in the Weekly Standard.

Excerpt:

A “man-cession.” That’s what some economists are starting to call it. Of the 5.7 million jobs Americans lost between December 2007 and May 2009, nearly 80 percent had been held by men. Mark Perry, an economist at the University of Michigan, characterizes the recession as a “downturn” for women but a “catastrophe” for men.

Men are bearing the brunt of the current economic crisis because they predominate in manufacturing and construction, the hardest-hit sectors, which have lost more than 3 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and health care, which gained 588,000 jobs during the same period. Rescuing hundreds of thousands of unemployed crane operators, welders, production line managers, and machine setters was never going to be easy. But the concerted opposition of several powerful women’s groups has made it all but impossible. Consider what just happened with the $787 billion American Recovery and Reinvestment Act of 2009.

[...]The National Organization for Women (NOW), the Feminist Majority, the Institute for Women’s Policy Research, and the National Women’s Law Center soon joined the battle against the supposedly sexist bailout of men’s jobs. At the suggestion of a staffer to Speaker of the House Nancy Pelosi, NOW president Kim Gandy canvassed for a female equivalent of the “testosterone-laden ‘shovel-ready’ ” terminology. (“Apron-ready” was broached but rejected.) Christina Romer, the highly regarded economist President Obama chose to chair his Council of Economic Advisers, would later say of her entrance on the political stage, “The very first email I got . . . was from a women’s group saying ‘We don’t want this stimulus package to just create jobs for burly men.’ ”

[...]Our incoming president did what many sensible men do when confronted by a chorus of female complaint: He changed his plan. He added health, education, and other human infrastructure components to the proposal. And he tasked Christina Romer and Jared Bernstein, Joseph Biden’s chief economist, with preparing an extraordinary report that calculated not only the number of jobs the plan would likely create, but the gender composition of the various employment sectors and the division of largess between women and men.

Romer and Bernstein delivered “The Job Impact of the American Recovery and Reinvestment Plan” on January 10. They estimated that “the total number of created jobs likely to go to women is roughly 42 percent.” Lest anyone miss the point, they added that since women had held only 20 percent of the jobs lost in the recession, the stimulus package now “skews job creation somewhat towards women.”

But in the lower quintiles, women can do a lot better for themselves and their children by getting married before having children. The second income makes a big difference. But what if men’s incomes go down, and their unemployment rate goes up?

The left-leaning Atlantic explains how it works.

Excerpt:

The good news, trumpeted in Women’s Work,the latest report from the Pew Economic Mobility Project, is that dramatic increases in women’s labor-force participation have boosted the “financial security and mobility” of millions of families across America since 1970. The bad news is that growing economic opportunities for women have not translated into more family income for poor and working-class families at the lower end of the income ladder.

[...]What accounts for the paradox that women’s income is rising across the board yet family income is falling for the bottom 40 percent of families? Mainly, to paraphrase [feminist] Hanna Rosin, the end of marriage and men in working-class and poor communities across the nation, coupled with the fact that maternal labor-force participation has plateaued since the 1990s. That is, a dramatic retreat from marriage, declines in men’s employment and income, and a leveling off of maternal labor-force participation have all combined to limit the income available to lower-income families, and to offset the increases in women’s income documented in this new report.

[...]One reason that lower-income families are losing economic ground is that gains in women’s income have been offset by declines in marriage among the poor and working class. As the figure below indicates, more than half of these families are headed by just one parent—typically a single mother. Lacking the income of two parents, or the income of a father, these single-parent families are much less likely to reap the benefits of increases in income that have accrued to today’s working women.

[...]Another major factor holding back families financially in the bottom 40 percent are declines in men’s income. Consistent with Rosin’s thesis, which argues that many men in the United States are seeing their economic fortunes erode, the graph below indicates that men’s personal income has fallen across most groups, but particularly among working-class and poor men. So, one more reason that family income has declined for poor and working-class families is that husbands and boyfriends have less dough to put on the table than they once did. This is particularly important because, even today, as the Pew report notes, men’s wage rates in couple-headed families are almost “twice as important as those of their female partners for boosting family income.”

So if you want to help poor women, here are two things that you should do. First, you should help men get better educations so they can get good-paying jobs, even at the low end of the job market. Second, we should be encouraging women to marry in order to get that second income (or only income, if it’s high enough) in order to help make ends meet. Unfortunately, the Democrats are opposed to both.

 

Filed under: News, , , , , ,

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