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Abundance & Scarcity

17 Tuesday Jan 2017

Posted by David H Lukenbill in Catholic Economics, Catholic Environment, History, Public Policy

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An excellent article from one of today’s great Catholic thinkers from Catholic World Report.

An excerpt.

I.

Back in the early 1970s, in the heyday of unceasing rancor over Humanae Vitae, a great number of books were published that prophesied disaster for the human race. Among the most famous was Paul Ehrlich’s widely read The Population Bomb. At that time, we were given various apocalyptic scenarios about the end of things caused by our own uncontrolled breeding. We were soon to starve to death. The world, then with a population of around three billion, was running out of food, clothing, gas, and just about everything else. Things could only get worse. Resources were “limited”; no more new ones were imaginable. The Catholic Church was often singled out as contributing to this approaching demise of the human race since she taught that the world was made for man. Her weird stance on human breeding was “irrational”. Her views on marriage and children were said to go against the principles of, you guessed it, “modern science”.

The main group that did not readily buy these forebodings were the economists, or at least the free market ones. (See, for example, John Mueller’s Redeeming Economics and John McNerney’s The Wealth of Persons). Not a few farmers and agrarian biologists also thought that perhaps increasing populations was not such a bad thing. Increased yields in many grains were shown to be quite feasible and soon put into production. India, once a basket case became a bread basket, an exporter of grain and not just an importer of it. Children and youth meant new markets and incentives. They also meant more potential workers who would be both producers and consumers. They were also provided some assurance to the elderly, as the Japanese and Europeans were to find out when they had too few of them. Some folks seemed to know how to respond to these so-called scarcities; others did not. It was something that needed to be both learned and encouraged.

World population proceeded to reach four billion, then five, and now approaches eight billion. If anything, we are better prepared to deal with eight billion than the world was  prepared to meet its needs when the population of the planet was less than half a billion. This is counter-intuitive; many would expect the opposite, especially if they do not really think about it. In fact, the whole socialist agenda was largely a thinking about it in a way that never worked and usually made things worse. The solutions based on empowering governments to deal with it always backfired. Instead of inciting growth and increased quality in things, government control of resources to insure justice invariably produced stagnation and inefficiency. Such a seemingly sensible solution produced something worse; good intentions did not produce good results.

At that time, I wrote two books, Human Dignity & Human Numbers and Welcome Number 4,000,000,000 (more recently, there is On Christianity & Prosperity). My thesis was that the birth of new human lives was not a disaster. It was something to rejoice about. This welcome was not merely in a family sense, but also in an economic, political, and cultural sense. This approach seemed to be the way things were supposed to work. Earlier writers such as Locke and Rousseau had understood this value of population long before Malthus came along with his calculus of a world with standing room only. Subsequent writers have often been amused to point out that we could put the whole present eight billion population of the earth into the state of Texas with about as much space between folks as present day New Yorkers enjoy in their neighborhoods. Increasing populations were in fact good, but this possibility depended on what we thought of the family, of children, and of the human ability to meet its own needs by means that actually work and were not intrinsically immoral. Man was not created with all the answers, but with the capacity to find good answers, and this process required a rejection of what did not work.

II.

At the time, I knew the late Julian Simon, whose books, The Ultimate Resource and The Ultimate Resource 2, proposed (along with George Gilder and Herman Kahn) that wealth was not a matter of supposedly available resources based on contemporary estimates of their quantities. Rather, the human mind was the only real source of wealth in the universe. The Arabs sat on pools of oil for centuries with no idea what to do with it. Oil or anything else is only valuable if some use can be found for it. It seemed odd at first sight that people would think that unused raw material was of any value at all. The American Indians, who were said to have had ten square miles of territory for each person when the colonists arrived, actually were not surviving well merely on what they could garner from unimproved nature. An intimate relation is found between human culture and nature. Contrary to some recent sentiments, the world was not intended just to sit there in order for us to admire it or to leave it alone.

At the time, everyone was amused when Simon made a bet with Ehrlich that in the future more—not fewer—resources of every type would be available than when the bet was made. Ehrlich assumed we were rapidly running out of most everything. As I read later, Ehrlich lost and paid the bet. Adequate resources become available when we need them—if we are permitted to figure out how to do so and are allowed to sell them in the market at a profit. Simon’s point was that resources are not merely things in the ground, sea, or air. They are products of mind that only come about when we have need of them.

This point is why the economist Joseph Schumpeter’s famous “entrepreneur” is so important. If someone does not know what to do or how to do something, nothing much will happen. Moreover, to understand the world as a place designed for what man is, we need to have a correct philosophy about what nature and man are in themselves and in their relation to each other. Poverty is mostly caused by bad ideas and lack of virtue, not lack of resources. Many cultures and societies are indeed stagnant because they never learned or never wanted to learn how to be otherwise. This is why cultures ought not simply to remain what they are. They ought to be open to what is the right order of things. Sometimes a little preaching helps.

After the seventies, the population issue seemed to die down. It became clear that resources were not the real problem, nor were babies. Governments, religions, and ideologies were the problem if they did not know or did not want to know how to deal with increasing human numbers. If there is a population problem, it is almost always the result of ideas and government controls that had other purposes than human well-being. In addition, the countries we thought to be the poorest, China and India, suddenly became richer, though with many a dubious anti-human policies still in place. The places where we were told people were starving, were in fact busy coping with smog from their new cars and industries. They had learned how to become rich by imitating enough of those systems that did know how to succeed in improving themselves.

Socialism Destroys

19 Monday Sep 2016

Posted by David H Lukenbill in Catholic Church, Catholic Economics, Catholic Politics, History

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As the Church taught for decades, and the current destruction is in Venezuela, as this story from Zero Hedge reports.

An excerpt.

  • The question of whether Socialism can be an effective economic system was famously raised when Margaret Thatcher said of the British Labor Party, “I think they’ve made the biggest financial mess that any government’s ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalise everything.”
  • There are dire reports of people waiting in supermarket lines all day, only to discover that expected food deliveries never arrived and the shelves are empty.
  • There are horrific tales of desperate people slaughtering zoo animals to provide their only meal of the day. Even household pets are targeted as a much-needed source for food.
  • President Maduro is doubling down on the proven failed policies and philosophies of “Bolivarian Socialism,” while diverting attention away from the crisis — pointing fingers at so-called “enemies” of Venezuela such as the United States, Saudi Arabia and others.
  • A dozen eggs was last reported to cost $150, and the International Monetary Fund “predicts that inflation in Venezuela will hit 720% this year.Severe shortages of food, clean water, electricity, medicines and hospital supplies punctuate a dire scenario of crime-ridden streets in the impoverished neighborhoods of this nearly failed OPEC state, which at one time claimed to be the most prosperous nation in Latin America.Darkness is falling on Hugo Chavez’s once-famous “Bolivarian revolution” that some policy experts, only a short time ago, thought would never end.“[a]t present it does not appear that the current economic expansion is about to end any time in the near future. The gains in poverty reduction, employment, education and health care that have occurred in the last few years are likely to continue along with the expansion.”The question of whether Socialism can be an effective economic system was famously raised when Margaret Thatcher said of the British Labor Party:In short: “The trouble with Socialism is that eventually you run out of other people’s money.”” …markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt. It is not easy for a nation to go bankrupt with the largest oil reserves in the world, but Venezuela has managed it. How? Well, a combination of bad luck and worse policies. The first step was when Hugo Chávez’s socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. That may all seem like it’s a good idea in general — but only as long as there’s money to spend. And by 2005 or so, Venezuela didn’t have any.”Chavez had the good fortune to die just before the grim reaper showed up on Venezuela’s doorstep. According to policy specialist Jose Cardenas:Maduro is doubling down on the failed Chavismo economic and social policies that have contributed to an inflationary crisis not seen since the days of the 1920’s Weimar Republic in Germany, when the cost of a loaf of bread was a wheelbarrow full of cash.There are dire reports of people waiting in supermarket lines all day, only to discover that expected food deliveries never arrived and the shelves are empty.There are horrific tales of desperate people slaughtering zoo animals to provide their only meal of the day. Even household pets are targeted as a much-needed source for food. This is a desperate time for a desperate people.
  • In desperation, some middle class families have organized online barter clubs as helpless citizens seek to trade anything for diapers and baby food, powdered milk, medicines, toilet paper and other essentials missing from store shelves or available only on the black market for double and triple already impossibly inflated prices..
  • Demonstrations and public cries for food are the unpleasant evidence of a once-prosperous society being torn apart by the very largess that marked its utopian ideals less than a decade ago.
  • “What began as a war against the ‘squalid’ oligarchy in order to build what he called ’21st-century socialism’ — cheered on as he was by many leftists from abroad — has collapsed into an unprecedented heap of misery and conflict.”
  • When President Nicolas Maduro inherited the Venezuelan Socialist “dream”, in April of 2013, just one month after Chavez died, he was facing a mere 53% inflation rate. Today the Venezuelan bolivar is virtually worthless, and inflation is creeping to 500% with expectations of much more. A recent Washington Post report stated:
  • “I think they’ve made the biggest financial mess that any government’s ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they’re now trying to control everything by other means.”
  • While it was not so long ago that many people heralded Venezuela as Latin America’s successful utopian Socialist experiment, something has gone dreadfully wrong as the revolution’s Marxist founder, Hugo Chavez, turned his Chavismo dream into an economic nightmare of unimaginable proportions.
  • In a 2007 study on the Chavez years for the Washington, DC-based Center for Economic and Policy Research, Mark Weisbrot and Luis Sandoval wrote:
  • Today, a once comfortable middle-class Venezuelan father is scrambling desperately to find his family’s next meal — sometimes hunting through garbage for salvageable food. The unfortunate 75% majority of Venezuelans already suffering extreme poverty are reportedly verging on starvation.
  • For many Venezuelans, by every economic, social and political measure, their nation is unravelling at breakneck speed.

Catholic Bishops & Government Money

09 Friday Sep 2016

Posted by David H Lukenbill in Catholic Church, Catholic Economics, Catholic Politics, History

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A devastating article from Remnant Newspaper lays out the money trail, and the political payoff.

An excerpt.

Crickets…….

The silence about Hillary Clinton is deafening. One hears nothing but crickets from the U.S. Bishops and Cardinals about the democratic presidential candidate’s radical pro-abortion stance, but for the banished Cardinal Raymond Burke.

Why are they sitting mute on the sidelines? How could they be conflicted between an abortion laden democratic platform and the most prolife republican platform ever? Seems like an obvious choice for Catholics. After all, St. John Paul II described life as “the most basic and fundamental right and the condition for all other personal rights.” What’s going on?

When in doubt, follow the money. This ecclesial trail is flush with cash.

Could it be that the bishops don’t want to anger their federal piggy bank by squealing about that rabid abortion loving democratic candidate, Hillary Clinton?

Could it be that the USCCB enjoys and wants to continue to be awash in Obama cash?

Did the democratic Obama Administration buy the election silence of the Catholic episcopacy by bestowing millions of federal dollars into the coffers of Catholic institutions?

Do the Bishops believe that a President Hillary Clinton is preferred because she will continue to fund their plentiful federal grants for Muslim refugee resettlement?

Oh, the irony! This is the same Obama Administration that has forced lawsuits by the Little Sisters of the Poor, Catholic schools, Catholic businesses and Catholic lay organizations for mandating compliance with Obamacare rules in violation of Catholic doctrine. Yet, the Bishops stand ready, willing, and able with their hand in the federal cookie jar to implement the Muslim refugee resettlement agenda.

While the Little Sisters of the Poor battled Uncle Sam, the U.S. Bishops and Cardinals were lining the Church coffers with blood money from Uncle Sam.

This isn’t about conscience, folks. It’s about their checkbook.

Take a look at the jaw dropping beneficence from the federal fairy godmother government deposited into the bank accounts of the Catholic hierarchal institutions. It’s all on display at USASpending.gov.

During the most anti-Catholic administration in the history of the U.S., the Catholic bishops have enjoyed enormous financial benefits carrying out the mission of the Obama administration.

Here’s the Church, here’s the steeple, open the doors and see all the federal dollars.

This is only a partial list of federal government grants to Catholic groups, but the USCCB, Catholic Charities, CRS and the International Catholic Migration Commission received jaw dropping grants to carry out the Obama agenda in FY16.

These grants cover fiscal year 2016 only:

United States Conference of Catholic Bishops

During FY16, the USCCB received federal grants totaling a whopping $91,132,305.

Hope for Africa

10 Thursday Dec 2015

Posted by David H Lukenbill in Catholic Economics, History

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We read so much about the hopelessness of so many African countries to ever become full-fledged members of the modern world, swamped as they seem to be in health care failures, violence, political tyranny, and financial corruption; that this story from the Wall Street Journal about an Opus Dei central banker is a welcome antidote.

An excerpt.

NAIROBI, Kenya —Heads of central banks seldom achieve celebrity status, but residents of the Kenyan capital regularly stop Patrick Njoroge on the street to talk interest rates and the state of the economy, even to snap selfies.

The tall, slim governor of Kenya’s central bank is a far cry from many of the continent’s top officials. He evinces no interest in amassing personal wealth, and he’s a numerary in the Roman Catholic group Opus Dei. That means he has taken a vow of celibacy and lives with others of his religious rank in a group home, after declining to live in the regal Nairobi residence reserved for the country’s central bank governor.

Six months into the job, the Yale-educated and former International Monetary Fund official has become well known in Kenya for his efforts to protect the country’s currency and for his perceived incorruptibility in a nation roiled by graft and economic uncertainty.

After moving aggressively to stabilize the Kenyan shilling, the confident, 54-year-old Mr. Njoroge is gearing up for the expected increase of the Federal Reserve’s policy rate.

“We feel quite prepared,” Mr. Njoroge said Tuesday as he sipped tea in his office in the central bank building in Nairobi. “We’ve gone out of our way to distinguish ourselves from the other economies” in Africa.

Kenya has built up dollar reserves of $6.7 billion and has access to another $700 billion from a special IMF fund should it be needed, he said.

East Africa’s largest and most advanced economy, Kenya is currently beset by a series of scandals that have exposed again the long-standing graft and corruption running through the country’s political and financial institutions. Against this backdrop, Mr. Njoroge has emerged as a standard-bearer for cleaner, better government.

“Why do I need to have a fleet of cars at my disposal?” he said, referring to one of the perquisites of high office in Kenya. “I’m only going to drive one. What’s the big deal?”

Mr. Njoroge’s refusal to exploit public office for personal gain goes down well with Kenyans. “He’s clean, he’s not here to eat or steal. Our prayers are with him,” said Anne Kinuthia, a receptionist at a Nairobi beauty parlor.

The efforts by Mr. Njoroge since June to halt the slide in the value of the shilling have won him widespread praise. By spending $1 billion to buttress the currency and hiking the policy rate twice by 150 basis points to 11.5% to stabilize the shilling, Kenya’s currency has steadily recovered since hitting a four-year low in September. It is now trading steadily in markets.

 

Catholic Socialism

20 Friday Feb 2015

Posted by David H Lukenbill in Catholic Church, Catholic Economics, Catholic Politics, History

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Unfortunately, it still remains a potent force in the Church, as this article from The Stream notes.

An excerpt.

The useful church news site Crux reports:

Italian Cardinal Edoardo Menichelli, from the diocese of Ancona, spoke to the Italian site Vatican Insider and promised a fight against capitalism similar to the one against communism under Pope St. John Paul II.

Of course, John Paul II had direct, personal experience of Communism. Neither Cardinal Menichelli nor Pope Francis has ever lived in anything like a free economy; both Italy’s and Argentina’s economies are prime examples of “crony capitalism,” a system in which powerful private interests use government intervention to shackle the market and fleece consumers through a mishmash of cronyism, subsidies, nepotism, and corruption.

Actually, those two countries are so far gone in this direction that it would be more accurate to describe their systems as “crony socialism.” In such a system, entrenched business interests wield populist rhetoric and back-room connections to boost prices and crush competitors — often in collusion with Marxist-controlled labor unions. So judging “capitalism” by their experiences with such countries is about as fair as evaluating democratic socialism based on Ceausescu’s Romania.

It can be hard for those who have never seen a free economy operate to believe that a society with transparent rules and honest, limited government can really exist — much less, that such societies typically prosper and improve the prospects for every class, especially the poor. Such colors are invisible to those born in deeply unfree economies, where the economic math is confined to zero-sum equations: If one man becomes a bit richer, it’s because he has stolen from the poor. In conditions of crony capitalism, outright socialism or feudalism, such an assertion is usually true.

Thus, the fierce anti-business rhetoric of many on the Catholic New Left might well be justified, if applied to oligarchs who manipulate government power via cronyism. But when such language is used indiscriminately to denounce honest businessmen, and blended with muddled versions of Christian warnings against materialism, the result veers between high-toned, harrumphing nonsense and historical revisionist goofiness.

We all remember the long list of capitalist countries that have descended into mass starvation, and the gulags, torture and political trials that marred American, British and Canadian history.  Oh wait, such atrocities happened not in those but in socialist countries. The capitalist countries, for all their flaws, raised the lower classes out of extreme poverty by the millions and now billions.

But with the Catholic New Left such historical facts, and even human reason, are asked to retire back awhile. Leftist economics are now a matter of dogma, imposed by religious authority:

The prelate said that the social dimension is an integral part of the faith, and quoted Francis’ apostolic exhortation, Evangelii Gaudium, in which the pontiff warned against ideologies that defend absolute market freedom and financial speculation. [emphasis added]

Retrieved February 20, 2015 from https://stream.org/italian-cardinal-promises-war-capitalism/

 

 

Capitalism is Cool

01 Wednesday Oct 2014

Posted by David H Lukenbill in Catholic Economics, History

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And this wonderful article from Forbes Magazine, reminds us, once again, why that is so.

An excerpt.

In the wake of the financial crisis, there has been no shortage of hand-wringing about the over-representation of top college graduates in a handful of fields, particularly finance, consulting, and law. Andrew Yang, himself a graduate of Brown University and Columbia Law School—whose first job was with a white-shoe law firm before leaving to found, and later, sell a successful business school test-prep company—decided to do something about what he viewed as “an inefficient allocation of talent in this country”.

Yang—one of four recipients of the Manhattan Institute’s $25,000 2014 Richard Cornuelle Awards for Social Entrepreneurship—set out to create a new route into the economy, for some of America’s best and brightest, whom Yang believed, based on his own network, “have too limited a vision of what career success looks like,” and wind up bored and unhappy with even well-paying jobs. He believed there to be an unfulfilled appetite to go to work for small, start-up businesses—to help, as he puts it, “build something”. For good measure, Yang hoped to bring such talent to some of America’s most distressed cities, including Detroit, Baltimore, and Philadelphia.

The result is Venture for America, which, in just three years, has successfully recruited more than 200 VFA Fellows (40 in 2012; 68 in 2013; 100 in 2014) from 48 colleges and universities (including Harvard, Dartmouth, Wesleyan, Emory, Washington & Lee, UC Santa Barbara, and the University of Chicago). Fellows commit to two-year stints at one of 105 affiliated start-ups in eight cities: Baltimore, Cincinnati, Cleveland, Detroit, Las Vegas, New Orleans, Philadelphia, and Providence.

One finds VFA Fellows in jeans and T-shirts at places like Detroit’s “Madison accelerator”—business incubators filled with start-ups sharing workspaces and conference space. There’s STIK, which uses personal endorsements and Facebook to spread product endorsements under contract to major firms (including General Motors GM -0.68%). There’s Boost Up, through which a range of big-purchase retailers (including Hyundai and Quicken Loans) match the savings of households putting aside money for a home or car. There’s Are You a Human, a web analytics firm, which markets ways to demonstrate to retail advertisers that an internet ad has actually been viewed.

Fellows—who, by accounts of firm principals, have become integral to the growth and operation of their respective businesses—bubble over with enthusiasm for VFA.

Retrieved September 30, 2014 from http://www.forbes.com/sites/howardhusock/2014/09/30/reclaiming-the-american-dream-ii-making-capitalism-cool/

The Holy Father & the Holy See

18 Monday Aug 2014

Posted by David H Lukenbill in Catholic Church, Catholic Economics, Holy Father

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An excellent article from Fortune Magazine revealing the managerial chops of the Holy Father, great reading.

An excerpt.

The new pope wanted to talk about money. That was the message that went out to a group of seven prominent financiers—major Catholics all—from around the world in the summer of 2013. Barely five months after the shocking resignation of Pope Benedict XVI, Pope Francis had summoned them to assemble at the seat of holy power, the Vatican. They knew their general assignment: to create a plan to restructure the Vatican’s scandal-plagued finances. And like Catholics everywhere, they knew that Francis had already signaled that he was a new kind of pontiff, a “people’s pope” who championed charity and tolerance over dogma. Still, they didn’t know what to expect when they arrived at the Vatican for a meeting with the pope on the first Saturday in August. How interested was he in finance, really? And how serious was he about changing business as usual inside the Vatican?

A major hint came from a change in tradition upon their arrival: The visitors didn’t report to the Apostolic Palace, the Renaissance showplace where for centuries past popes had received visitors in high style. Instead they entered Vatican City on the other side of the colonnade of St. Peter’s Square and took a 150-yard stroll through the hilly enclave to the new pope’s place of business—Casa Santa Marta, a five-story limestone guesthouse that could be mistaken for a newish hotel. There they were ushered into a nondescript meeting room on the first floor with no paintings or religious ornaments and took their seats around a conference table. The members—including Jean-Baptiste de Franssu, ex-chief of asset-management giant Invesco in Europe; Jochen Messemer, a top executive at ERGO, a large German insurer; and George Yeo, former foreign minister of Singapore—chatted nervously as they waited.

After 15 minutes, Pope Francis entered the room—and got right down to business. Attired in a simple white cassock and plain metal cross, he took his place standing at the head of the table. With little preamble, he began outlining his strategic vision, in an approach described by one participant as “highly managerial.” Speaking in fluent Italian and taking frequent pauses while a translator repeated his words in English, the pope explained to the group that for his spiritual message to be credible, the Vatican’s finances must be credible as well. After centuries of secrecy and intrigue, it was time to open the books to the faithful. Strict rules and protocols must be adopted to end the cycle of scandals that had plagued the Vatican in recent years.

Francis declared that sound financial management was a pillar of his greatest mission: aiding the poor and underprivileged. That mission was endangered by volatile, unpredictable budgets that careened from modest surpluses to steep deficits. The Vatican’s inept practices had inhibited giving, he explained, and had to stop. “When the administration is fat, it’s unhealthy,” he said. Francis wanted a leaner, more efficient Vatican administration that would be solidly “self-sustaining.” That, he said, would free up more money for his charities. “You are the experts,” the pope said, “and I trust you. Now I want solutions to these problems, and I want them as soon as possible.” With that, Francis left the group to figure out the details.

Retrieved August 15, 2014 from http://fortune.com/2014/08/14/this-pope-means-business/

Book on Capitalism Uses Bad Data? Part Two

02 Monday Jun 2014

Posted by David H Lukenbill in Catholic Economics, History

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The economist whose book we blogged on Thursday responds in the New York Times.

An excerpt.

Six days after The Financial Times launched an attack on the data behind Thomas Piketty’s much-debated tome on inequality, “Capital in the Twenty-First Century,” Mr. Piketty has offered his first detailed response to the newspaper’s criticism.

The short version: He doesn’t give an inch.

In response to a request from The New York Times to further address the criticisms, which The Financial Times published on Friday, Mr. Piketty, a professor at the Paris School of Economics, wrote that his data were correct, and his conclusions stood: Wealth inequality in Europe and the United States was high in the years before World War I, fell for much of the 20th century, and has been rising sharply again in the past three decades.

He argued that many of the things that The Financial Times identified as sloppy or arbitrary were in fact considered choices, which he explained in footnotes. Reasonable people might disagree with some of his choices of how to handle the data, he says. But even where there’s room for debate, any reasonable changes to his methodology would be small and not alter the broad conclusions, he suggested.

The part of the newspaper’s critique that throws the most doubt on his overall conclusions is its argument that wealth inequality in Britain has risen much less than Mr. Piketty contends. For that, he has sharp words. He says the newspaper’s analysis rests on apples-to-oranges comparisons of past data from tax returns mixed with current data from surveys, which makes the conclusions they reach deeply flawed, and contrary to what a wide range of other studies have found.

Retrieved May 29, 2014 from http://www.nytimes.com/2014/05/30/upshot/thomas-piketty-responds-to-criticism-of-his-data.html?hp

Book on Capitalism Uses Bad Data? Part One

29 Thursday May 2014

Posted by David H Lukenbill in Catholic Economics, History

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The most important book on economics this year takes issue with the success of capitalism by claiming that the concentration of wealth in the top 1% has grown; but according to this article from the New York Times, it appears some of the data used in that book is suspect.

An excerpt from the New York Times.

One of the most common approaches for people writing about Thomas Piketty’s blockbuster book “Capital in the 21st Century,” about global inequality, has been to critique his theories and predictions while effusively praising his data collection. Mr. Piketty, after all, did yeoman’s work compiling data from tax and other records to try to determine a history of wealth inequality around the world.

But now The Financial Times is throwing doubt on the data at the core of Mr. Piketty’s work, in a blockbuster report that will open a new debate on how reliable the book’s excavation of historical patterns of income and wealth truly are. At issue: Is the most influential economics book of the year built on bad math?

“The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war,” writes Chris Giles, the economics editor of The Financial Times. “The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.”

Retrieved May 23, 2014 from http://www.nytimes.com/2014/05/24/upshot/did-piketty-get-his-math-wrong.html?hp

Living Wage

08 Tuesday Apr 2014

Posted by David H Lukenbill in Catholic Church, Catholic Economics, Catholic Politics

≈ Leave a comment

Supporting the living wage being established as the minimum wage—based on the economics of each region rather than a hard number—is a sound strategy, which, not only helps recently released prisoners, but also can contribute to the economy by increasing the number of households that will be created because individuals would be able to pay prevailing rents, whereas those working on minimum wages as now established, cannot.

The vastly increased number of households would all be buying goods to furnish their new homes and the economy would benefit.

The Catholic position can be accessed in this two page statement from the USCCB,
http://www.usccb.org/issues-and-action/human-life-and-dignity/labor-employment/upload/minimum-wage-backgrounder-2014-01.pdf and from this 40 slide power point presentation at http://www.usccb.org/about/justice-peace-and-human-development/catholic-social-ministry-gathering/upload/csmg-naughton-keynote-2014-02-03.pdf

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