Thursday Evening Highlight

Upon reading Fulton Sheen's You, I get to chapter "How You Are Re-made?" which has a great ending.

Do not fear God with a servile fear, for perfect love casts out such fear. Be bold enough then to believe that God is on your side, even when you forget to be on His. Live your life not by law, but by love. As St. Augustine put: "Love God and then do whatever you please." For if you love God, you will never do anything to hurt Him or break off relationship with Him - and then you will always be happy.

Furthermore- Pope Benedict had stated:

in his homily, to urge the faithful to imitate that trust in God, rather than submitting to "the tyranny of materialism" or "selfish illusions and false ideals." [...]
Economic development is certainly necessary, the Pope said, but "it is high time to place greater emphasis on this: every human being, every tiny human person, however weak, is created in the image and likeness of God."
Trust in God is a formula for hope, the Pontiff said. He reminded Christians: "Africa is called to hope through you and in you." By the witness of Christians, he proclaimed: "Africa can become the continent of hope!"

Do you think the Holy Father's words "tyranny of materialism" is against those who believe in a free market or those who look to government to intercede and save the economy?

Love and Economics on Econ Log with Bryan Caplan

Bryan Caplan, professor of economics at GMU, blogs at EconLog and he raises questions on Jennifer Roback Morse's book Love and Economics.

Why do I link it here?
Morse defines herself as a Catholic first, a parent second, and an economist third.
With priorities like this, why shouldn't we look into her work more.

She also rebuts Caplan and others in the comments.

Cardinal Fulton Sheen Challenge

The fact is: you want to be perfectly happy, but you are not. Your life has been a series of disappointments, shocks, and disillusionments. How have you reacted to your disappointments? Either you became cynical or else you became religious. If you became cynical, you blamed things rather than yourself. [....] In every instance, you made happiness extrinsic to yourself. No wonder you are never happy. You are chasing mirages until death overtakes you. But cynicism did not work, because in seeking pleasures you missed the joys of life. Pleasure is of the body; joy is of the mind and heart. [....] You can quickly become tired of pleasures, but you never tire of joys. A pleasure can be increased to a point where it ceases to be a pleasure; it may even begin to be a pain if carried beyond a certain point[....]

Furthermore, have you noticed that as your desire for pleasure increased, the satisfaction from the pleasure decreased? Do you think a philosophy of life is right that is based on the law of diminishing returns? (emphasis mine) - Fulton Sheen - Are You Happy?

Three Sentence Challenge: Update

I answer the question I had raised end of last week.

Obama orders funding embryo stem cell

I watched the signing ceremony on CNBC for President Obama's "lauded and historic" signing; an executive order to allow federal funding for embryonic stem cell research.

Larry Kudlow following the signing quickly added, "This is a bad idea. I have moral and religious objections to this type of stem cell research. It's a hot button issue. I'm not objecting to having private investment in the free market for this, but to ask the taxpayers, who have religious and moral objections, to pay for this is just a bad idea. It's a hot button issue."

Following that quote, the CNBC host reported that many stem cell research companies are already seeking those funds.

A glance at major news headlines tells a one-sided story. One states, "Stem-cell policy change liberating to researchers" [emphasis added]. Empryonic stem cell researches could get any person in the world for funding, but only now do they feel "liberated" now that the restrictions lifted on federal funding have been removed.

Many people assume (and rightly so due to the media) that funding for embryonic stem cell research stopped in 2001. This is incorrect. Connecticut, Arkansas, and most notibly California have been funding for it.

There are currently 70 stem cell lines that are producing very positive results and effective treatments - using adult stem cells.

This begs the question: Why is embryonic stem cell research still being pushed? Follow the money.


On a side note, if Roe v. Wade was overturned, embryonic stem cell research would not fit the criteria for an Abortion in the legal sense.

"Ab" in Abortion means literally "to pull away from". The term Abortion in US criminal law did not include the killing of the child. For example, in Virginia's anti-abortion statute, which passed in the 1850's through 1971, the language read, "No abortion, except to save the life of the mother or the child." So, clearly, Abortion did not mean the killing of the child, rather the separation of mother and child. And since the embryo is concieved in a petri dish, this would not be concidered an abortion.

If Roe v. Wade was thrown out due to no grounds to make the ruling in the first place, then to protect life you would need personhood amendment's in the states which defined life at conception, and did not take into account the means of conception, whether it be a petri dish or intercourse.

Three Sentence Challenge, Encyclical Edition : UPDATE

Let us say the Holy Father is working on his new encyclical and needs assistance in his economic thought.
He will take three sentences from anyone.
What would you write?

Update:
I had made the challenge, but I had not given my own three sentences.

1. Incentives matter
2. Institutions (rules of the game) matter
3. Price controls do not only have short term effects but long term effects.

I think if Frederick Bastiat were alive, he would advise the Holy Father with words from one of his famous essays.

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

I wish I had challenged five sentences so that Bastiat could add the next paragraphs:

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.

Any system built on Greed will fail...

I look forward to this new encyclical with each passing word of its coming.
Morals are an important issue that should be addressed.

The question will be, do most Catholics believe that Capitalism is based on greed?
I know there are economic professors who teach that greed is good, but as Catholics, we recognize greed as one of the Seven Deadly Sins.
Are professors and Catholics discussing two different types of greed?
Or can Catholics not be Capitalists?

Catholicism and the Sciences

Many are still taught today that Galileo went against the Catholic Church when he proclaimed the Earth went around the sun. This is false, and that it is still taught / believed is very troublesome.

Truth is that many Catholics shared this belief of a helio-centric universe. It was Galileo's interpretation of scripture that caused the troubles, we all read about in history books.

Find more here.

Being a Catholic, does not take away economic logic. Demand curves slope downwards, and a price fix on anything will surely cause a problem in either a shortage or a surplus. As long as we don't make outlandish claims against scripture i.e. Jesus belongs to any political party, believes in any type of governing body, etc.

Thus we can disagree with Catholic Social Teaching as it is not dogmatic. I hope this will be the beginning of my posts against some beliefs held widely within the Church. For instance, that Fair Trade is good for the Third World.

Pigou Club for Children?

If I'm a Green Puritan it makes sense. Children impose a negative environmental externality. Therefore, the social cost of a child is greater than the private cost. So we draw our little externality graph, and pick Q*, and tax each additional child for n >2 to get the "socially optimal" number of children. With moral and economic understanding like this, I wouldn't be surprised to see it suggested at some point. 

Jonathon Porritt, who chairs the government’s Sustainable Development Commission, says curbing population growth through contraception and abortion must be at the heart of policies to fight global warming. He says political leaders and green campaigners should stop dodging the issue of environmental harm caused by an expanding population.

A new Social Encyclical to be coming

Pope Benedict XVI is working on a new encyclical on macro and micro economic policies.

Can find more info here.

What do you expect Pope Benedict XVI to address in this encyclical?

Signs and Symbols Help to Communicate

Man is an empirical being. We have been given our senses to learn things through our interaction with the world. Many philosophers try to use this as the staple to their thought, but man is not simply a body. We have a soul.

This is the notion that we begin to understand once we begin studying Pope John Paul II's Theology of the Body.
Our Lord, Jesus Christ, has given us certain Sacraments so that we may experience God within the world through our senses of the body.

The Catechism tells us that Man "needs signs and symbols to communicate."(no. 1146)

In the market economy, we have a sign that helps us to communicate. It allows us to know who needs what resource more than another in comparison with other individuals.
There is not enough information within the world for us to know how much of something or another any individual but ourselves need. Preferences are known only to the individual self, unless he tells another. Even then, his preference will change from one moment to the next and the person he had told will no longer know for a fact what the other needs.
If conventional communication such as speech is not suitable for us to notify others of our ever changing needs, how does man interact without conflict?

The answer is prices. Prices are the sign within the market economy. When one purchases an apple he sends a message to others that there is one less apple in the world. The prices of all the other apples would then change to signify the use of an apple. In this format, man can successfully interact without conflict.

What other signs help us communicate? What other symbols allow us to socially cooperate with one another peacefully?

Archbishop Chaput on Catholic Politcal Vocation

This is the entire text of Archbishop Chaput's speech in Canada.
It is well done and I recommend all to read it.
It can be best summed with his concluding paragraphs:

Anyone who hasn't noticed the despair in the world should probably go back to sleep. The word "hope" on a campaign poster may give us a little thrill of righteousness, but the world will still be a wreck when the drug wears off. We can only attain hope through truth. And what that means is this: From the moment Jesus said, "I am the way, the truth and the life," the most important political statement anyone can make is "Jesus Christ is Lord."

We serve Caesar best by serving God first. We honor our nation best by living our Catholic faith honestly and vigorously, and bringing it without apology into the public square and its debates. We're citizens of heaven first. But just as God so loved the world that he sent his only son, so the glory and irony of the Christian life is this: The more faithfully we love God, the more truly we serve the world.

Archbishop Chaput lists four things Catholics should be reminded of

1. "all political leaders draw their authority from God"
2. "in democracies, we elect public servants, not messiahs"
3. "It doesn't matter what we claim to believe if we're unwilling to act on our beliefs."
4. "The Church in the United States has done a poor job of forming the faith and conscience of Catholics for more than 40 years."

I do disagree with Archbishop Chaput on President Obama's election:

But it does place some of today's talk about a "new American mandate" in perspective. Americans, including many Catholics, elected a gifted man to fix an economic crisis. That's the mandate.

To fix an economic crisis, we would expect the use of economists and to have an understanding of how the economy works. President Obama was elected, but this does not mean that he was elected to interfere with something he knows very little of. Electing an official does not grant someone the ability to meddle with things they do not know. Remember voters aren't experts on all things. Should they vote to fix the economy if they know little of it?
Let us remember Bryan Caplan on 20/20, "If you do not know what you are doing, you are not doing the country a favor by voting."

Welcome Catholic Economists - Ash Wednesday

It is the final hour of Ash Wednesday. The beginning of Lent which prepares us for the death of Christ and the beginning of our freedom from sin. Today is the reminder for all Catholics that from dust we came and to dust we shall go. It is a reminder that death awaits us and that we should not be saddened by this fact but rejoice.

This is an important fact because today we find ourselves in a crucial situation. The doom and gloom of the economy has been broadcasted by the media and our government officials. They claim that without government action the economy will fail and people will face harsh times. There are many others who conclude that government intervention will only cause the harsh times to be extended.

We, the Catholic Economists, hope to open discussions for what Catholic Social Teaching says about the economy; if Catholic Social Teaching is supported with economics; and many other questions that we may arise.

As Catholics, do not be afraid of the doom and gloom tales of the economy. The economy is merely a word that represents all of human interaction. For the economy to "fail" would mean that we all fail at interacting with one another. Unless you believe you are failing at interacting, there is no need to fear. Life is meant to be a challenge. Everything we need has already been given to us(our daily bread) , and with that we begin with a prayer.

Lord,
Allow us on this blog to proclaim your glory and not stray from the teachings of the Church. Grant us the wisdom, the knowledge, and the ability to spread our Catholic views while applying economic thought. We pray for the intercession of the Holy Mother that we do not cause hate but spread a message of love.
St Thomas Aquinas, pray for us.
St Bernadette, pray for us.
St Bellarmine, pray for us.

Atlas may have Shrugged; Christ Did Not.

In the Economic Way of Thinking blog (which if you hadn't already began reading, you should), Scott Beaulier cites Ayn Rand's Atlas Shrugged. Below is the citation,

FRANCISCO: “Mr. Rearden,” said Francisco, his voice solemnly calm, “if you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down on his shoulders—what would you tell him to do?”
HANK: “I…don’t know. What…could he do? What would you tell him?”
FRANCISCO: “To shrug.”

What do you take from this quote? What does it mean for Atlas to shrug?
Has there ever been an individual who held the fate of the world on his shoulders, and did he shrug?

As a Christian, I believe there is someone who had bore the weight of the world on his shoulders, but he did not carry the world; it was a cross. Through all the tribulation that He had faced, He did not shrug.
And asking the same question as Rand did, " if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down on his shoulders—what would you tell him to do?”
If he was told to shrug, I am glad that He didn't listen.

Prodigal Parent

This past summer I sat in a seminar with Jennifer Roback Morse leading to a discussion afterwards on parents leaving their children and then having to return.

What's your take on the Prodigal Parent?

Yes, mother, this one is to you...

For those who don't know the story of the prodigal son, you can find it here.
There are many points in the parable, but the easiest read is the reception in the return for the son. Should there not then be a reception at the return for the mother?

A Challenge: Think you know Love?

This morning I was listening to "Hey Ya" by Outkast. Popular song with a great beat and enthusiastic chorus, but there came a line that caused me to think for a bit.

The line states that they say nothing is forever, so what makes love the exception?

Can anyone answer the question risen by Andre 3000 in this song?
If all things must come to an end, why do we expect our relationships to last forever?

I'll take it a step further, once I have a few answers on this one.

Economics Taught What Once Was Taught as Right was Always the Wrong.

Economics is a unique field of study. After a few questions it led me to open my eyes to a different world. An equilibrium between cars in each traffic lane, and the equilibrium would then help us assess which lane we ourselves want to drive on. This equilibrium helped us make our decision, it was information.
This question and answer leads to the want of applying such thought onto all things. Taking history classes became entertaining. It was no longer a memorization game but of applying the new theory that people make decisions using the equilibrium. How to know when to apply it? That was simple, I merely had to ask "why?" Why did some colonists revolt against the British? Why did the British not allow the colonists to leave peacefully?

Or how about the look back to what I was always taught throughout my years at public school and my first economic class. That the government, FDR, had saved us from the collapse of the market. We should all rejoice at the salvation from turmoil that was brought to us by the government. Apply economics to this period and a new outlook arises. I was lied to.
Arise the question of why? Why was I lied to? What is to gain?
What does economics teach? Incentives matter.
Why do incentives matter? As it gives rise to innovation.
Why does innovation matter? Others will imitate it.

Nothing is as black and white as I was once taught.
Government does not simply do what is best for the nation. Why?
Individuals choose not groups. With this simple find, we learn that politicians have the incentive not to do what is right, but to abuse their power.

I was taught to want to be President. Not anymore. Economics has taught me many things and what I would hope it teaches others is simply don't study and read material because we need to pass a class. Ask why? Why did this happen? Search for truth, you know you reached it once it has answered the question, "why?"

Cold Hearted or a Life with Morals

Scenario:
Many individuals find work and put their effort into being good at their job so that they can maintain a satisfying life. The company goes under and the workers are now out of work. Is this now my duty to give money to support them? If so, what incentives are we giving here; to not work hard let the company fail because in the end you are still supported? Is there something I am missing? Am I just cold-hearted or am I just being moralistic.

Sorry the company failed. I know if I were out of a job I'd want help too, but lets not reward bad behavior otherwise we should not punish the disobedient child.

Rewards and prizes go to those who deserve it, not to he who cries loudest. Society as a whole frowns upon the parent who give in to the bratty kid, why should we give in to the grown ups who cry loudest?

Padre Pio on Joining the Catholic Church

As a Sponsor reading this gave me inspiration to make sure I am doing things right.

Once Padre Pio was asked "Father, you, helped by many praying souls, work hard to bring back souls who have fallen away to the heart of the Church. At the same time you leave them for months without absolution. Doesn't this mean you leave them out of the Church?"

The Padre answered "It isn't enough to enter the Church. You need to come in well. For you it is enough that they enter in Mass. For me it's important they are well prepared to come in. The months used to prepare one to be part of the Church are well spent. Entering unprepared is just the same as not entering."

When told "Father, those people that you do not absolve, in the case of sudden death, run the risk of damnation". He responded "But who told you that these souls are in God's bad books!?"
The questioner objected: "And if they are not in God's bad books why can't they approach the Eucharist?" To which Padre Pio replied "Because they have to do a particular penance."

-THE "PADRE" SAINT PIO OF PIETRELCINA : HIS MISSION TO SAVE SOULS
TESTIMONIES pgs 83-84

This world to our Heavenly home.

The wisest words I had heard this past week came from a priest who instructed me that it is not this world that matters but the next. We must not begin to think that God is on our side, but rather must keep asking ourselves are we in on his.

In other words, it is understandable why we get disgusted and upset by all the atrocities in the world today, but we should not allow these things to deter us from our goal of fulfilling the Father's will. There will always be violence, theft, murder, and other vile acts. The only possible way to reach zero crime is to have no freedom, and even then it is only obtained for a short period of time.
I am guilty of allowing myself to get upset and fired against the wickedness of the collectivist state, against the murder of innocents, etc. I must not allow myself to grow with this rage as it is deterring me from fulfilling the end that I want, to perform God's will.

Economics is a very unique study. It allows us to comprehend human cooperation in ways no other study can. With this I bring up price fixations. When economists speak of the market, they simply mean the players, the actors, the choosers, or in other words, all of us in this world who each day make a decision at a certain moment. We are the market. We, upon making a decision, impact an individual who we never have met. By purchasing an apple, that individual now cannot. By performing a job, that individual now can not. This is not to give the perception that the market is simply those taking from others, but rather to simply demonstrate how your choice would affect my own without your knowledge of ever meaning to.

Prices are a reflection of our choices. They help us understand where the good or services should go and to whom. Law of demand states as price goes up quantity demanded goes down. Likewise if price goes down quantity demanded goes up. Law of supply states that as price goes up, quantity supplied goes up. Following, price goes down and quantity supplied will go down. This also works vice-versa so we can find price from supply and demand. The key is the word and here, supply and demand.

What I am getting at is simple, there is an equilibrium, where supply and demand meet, for everything. There is a price and quantity for everything and the equilibrium is where they interchange. To create a law setting something at zero such as zero crime would be a price fixation. It is called a fixation because naturally our choices in the world give us a natural equilibrium meaning there is still crime in the world, but with a price fixation at zero we find something different. Now my choices have an increased cost which will impact the world in a harsh way because less people are doing it which means that quantity demanded is low that lets us know from the law of demand that price must be high. Accordingly with the law of supply we know that when price is high; quantity supplied is high. The signal this law is giving to the world is to cheat the system. Find a way to perform a crime, as the benefits are extremely high.

Think of Batman the Dark Knight. He begins to lock up all the criminals and with the lesser amount of criminals to rob from the innocent, the profit and amount of people to choose from stealing from is inherently high. A market that is hard to get into yet highly profitable; these are incentives that give rise to the Joker. (Money is not always the incentive. In the case of the Joker, being THE criminal of Gotham was more important.)
In the 1920's, Al Capone was a product of the Prohibition. He loved the law as it created more wealth for him. When competitors moved in, he moved them out or recruited them through force.
We can not hate anything of this world and seek government assistance to help us reach our solutions. We can not allow ourselves to be consumed in combating certain aspects of this world that we condemn ourselves from being in full communion in the next. What is here is only temporal. It is important and we should fight, but let our life's work be to do God's will and not our own. There will always be a form of evil in this world. We can not fight evil with evil, but fight it with love. As we hear time and time again, Love conquers evil.