This message isn’t difficult to sell to some audiences; those who are entrepreneurially-minded, those who have lived in repressive regimes, those who casually observe the history of standards of living, all easily recognize the benefits of free trade. The message is much harder for others, who knowingly or unknowingly remain committed to mercantilism or Marxism. The Church isn’t exempt either; whenever greed is spoken of as a deadly sin, the unspoken suggestion is typically that those guilty are the rich, as if poor folks can’t be greedy. Whenever public policy is debated, Catholics speak in simplistic terms about “helping the poor” and support legislation that is thus phrased but whose actual effects are virtually always the opposite (yes, a higher minimum wage hurts many more poor, inexperienced workers than it helps). Despite the bulk of academic research supporting the benefits of free trade, and despite the economic malaise of “middle-of-the-road” countries who pay lip service to capitalism but are hugely regulated and heavily taxed, many in the Church seem willing to let Caesar engorge itself, thereby requiring us taxpayers to forcibly render increasing shares of the fruits of our labor to him.

Bread line in Gaza. Breadline – Flickr – Al Jazeera English.jpg at wikimedia commons

Venezuela should be a test case. Full of natural resources, and boasting a good standard of living in the 1960s, its per capita income has stayed flat since. The “progressive” socialism under the late Hugo Chavez seemed to have all the right solutions: when people are poor, of course the solution is to prevent high prices, right?

The government of oil-rich Venezuela has kept in place price and currency controls introduced under the government of President Hugo Chavez, who died in March after a prolonged battle with cancer. Those restrictions have limited the availability of products to consumers. ”They have kept the prices down with controls, and that has kept inflation relatively low, but it can’t last,” said economist Robert Bottome, who runs a consultancy in Caracas. “Things are going to get worse.” Chavez’s successor, Nicolas Maduro, has tried to ease some of the pressures by making the dollar more available to some businesses, thereby allowing them to import more goods, but shortages have persisted.

What kinds of shortages, you ask? The kind that hopefully will be a clear signal to those in the Church that meddling in markets always leads to bad results:

In Venezuela, shortages include bread for Communion, sacramental wine

In his small parish outside of Venezuela’s capital, Caracas, Father Maximo Mateos is filling his chalice with less than half the amount of wine he formerly used. The priests at Our Lady of the Rosary Parish in Caracas are precariously close to running out of sacramental wine. And for the Sisters of the Adoration, finding good wheat flour to make Communion wafers is becoming harder and more expensive. In Venezuela, sporadic shortages of basic goods can turn a roll of toilet paper into a rare commodity; add bread and wine to the list of scarce products.

There is a clear reason why the shortages are occurring. Of course, the government has its own opinion of why:

The Venezuelan government announced in early June that it would start testing a program designed to prevent hoarding. The program will digitally track shoppers in the state of Zulia, which includes the country’s second-largest city, Maracaibo, and will limit the amount of basic goods they can buy in one day.

Yup, hoarding by Venezuelans. The government steps in, presuming to know the “right” price of things and forcibly pushes prices downward. The shortage is guaranteed as an artificially low price encourages consumption and discourages production. The government’s price control is directly to blame, but you can’t expect it to admit fault. So, it does what it does best: intrudes once again on individual liberty by tracking your purchases and telling you when you’ve had enough.

You’ll forgive me for not being surprised at the situation there. Experiments in price controls have happened for thousands of years with exactly the same results. But, and people in the Church deceived into thinking that the state can fix any problem, maybe this time will be different…

You’ll forgive my frustration; it’s bad enough when stupid government policies keep bread out of the hands of the poorest people on earth. Now stupid government policies are preventing poor people from being able to receive the Bread of Life.

Father Murphy was in rare form in the pulpit on Sunday, exhorting his parishoners to be more generous. “If ye have an excess, share with those who have naught,” he said. “It is the Christian thing to do.” To make an example of one of the exemplary local farmers he asked O’Toole to stand up. “O’Toole, if ye had ten cows, would ye not give two to poor O’Shaughnessy here, who has only one?” “I would, Father,” replied O’Toole.” Pleased, Father Murphy continued, “And if ye had 10 geese would ye not spare a few for McBride here, whose last goose just died?” “That I would, Father,” O’Toole replied. And Father Murphy pressed one more time, “And if ye had three greyhounds, would ye not give one to McEnchroe here who has none?” “I would not, Father.” Father Murphy was a little taken aback and asked O’Toole, “Why ever would ye not?” O’Toole quickly responded, “Because I HAVE three greyhounds!”

Democrat Senator Tom Harkin of Iowa thinks the problem is that the wrong people have the greyhounds, and the people who should have the greyhounds are the people who run our government.

I look at it this way: we’re the richest nation in the history of the world.  That kind of begs the question doesn’t it? If we’re so rich, why are we so broke?

Is it a spending problem?  No, it’s because we have a misallocation of capital, a misallocation of wealth.

All of this wealth that’s been built up by hard-working Americans has been accumulated into fewer and fewer and fewer hands all the time.

I tell you we’ve got to get back to a better, rationale [sic] system of revenues and spending in this country and back to our obligations. I just feel very strongly, that it’s not just appropriations that’s causing this problem.

It’s the lack of the revenue that we should be taking in to meet our obligations as a country.

In modified Hal Roach terms, the government, which has more greyhounds than anyone, doesn’t believe it has enough greyhounds, and that’s not because they run their greyhounds into the ground, it’s because you insist on keeping your greyhounds that you raised from pups.

Too many filthy rich people are holding too much wealth and Harkin doesn’t think the government is taking enough of it from them.

Okay, then.

The obvious solution is to confiscate the wealth of Bill and Melinda Gates, Warren Buffet, Larry Ellison, the Koch Brothers, the Walton clan, Hizzoner Mike Bloomberg, and all the rest of the Fortune 400.

Problems with that: first, a bunch of them are Democrat donors (or office holders!) and would not likely be keen on Democrats proposing that their wealth be, erm, “reallocated.” Second, more practically, the entire combined net worth of the entire lot of them is only $1.37 trillion. Yes, I said “only” $1.37 trillion, because while that covers the budget deficit for one of Obama’s years in office (which reached $1.1 trillion in 2012), it covers nowhere near even half of government outlays in a given year, which in 2012 rose to $3.6 trillion.

And then, of course, since these folks would no longer have the wealth they once had used to create more wealth for themselves and others, you’ve killed the 400 geese that lay the largest golden eggs and undercut a whole swath of jobs their wealth formerly supported. Whose wealth are you going to confiscate in year two?

Perhaps Harkin is not proposing confiscating the entire wealth of these people. How much? Half? That won’t close the budget deficit. Three-quarters? That would close the 2012 deficit, but not future deficits under the Obama spending model, and it would financially cripple these folks nearly as much as taking all of their money. So we’re back to square one.

If Senator Harkin is serious about the misallocation of wealth and truly thinks many people can and should do with less, perhaps he can suggest starting wealth reallocation with government salaries. Starting, perhaps, with congressional salaries—representatives and senators. Set an example. Stand up to Nancy Pelosi and let her know that, even though the work legislators do has “dignity,” everyone has to do their part to rectify the wealth misallocation problem, legislators should lead by example, and daggonit, it’s the right thing to do.

Somehow I don’t think that’s what he meant.

The only sentence in there that is even semi-connected to reality is “I tell you we’ve got to get back to a better, rationale [sic] system of revenues and spending in this country and back to our obligations.”

No. Argument. There.

The problem is where Harkin would go with the meaning of the words “better, rational,” with regard to spending and taxes, and especially what he would mean by “obligations.” While our government may have promised all kinds of things to all kinds of people over the decades, if those things are dragging us underwater they cease to be obligations and they become liabilities. Our social safety net is not a suicide pact, it ought not be allowed to become one.

Happily, Harkin is retiring in 2014 so we only have a short time left with him.

And, ironically, if Harkin follows the lead of so many of his colleagues, he’ll move uptown from an office in the Hart Senate Office Building to a posh office on K Street, where he’ll make even more money as a lobbyist. (Money he would not, presumably, think it fair for the government simply to “reallocate.”)

Please don't let the government take us! They'll misallocate us!

As with other economists like Milton Friedman and Paul Krugman, most people know James Buchanan not for these technical achievements but for other, more popular, ideas. You can summarize Buchanan’s popular contributions in the subtitle of one of his essays: “Politics Without Romance.” Understanding Buchanan seems necessary especially considering that Church leaders occasionally (or too frequently, IMHO) seek government remedies for particular problems (like fighting poverty, passing legislation, immigration reform, “fair” trade rules, protecting jobs or wages, etc.) while simultaneously adhering to a “romantic” model of the political process. “Romantic” politics is the sort we were all taught in grade school: disinterested public servants selflessly giving their time and effort all for the common good. The reality, as Buchanan and public choice theory demonstrates, is (not surprisingly) that politicians are people too; they have beliefs, biases, desires, and respond to incentives like the rest of us. Adhering to the “romantic” political belief in sinless philosopher kings serves no useful purpose if we are at all to engage in politics as it really is.

Some tantalizing quotes from “Politics Without Romance:”

• “If the government is empowered to grant monopoly rights or tariff protection to one group, at the expense of the general public or of designated losers, it follows that potential beneficiaries will compete for the prize. And since only one group can be rewarded, the resources invested by other groups-which could have been used to produce valued goods and services-are wasted.”
• “Much of the growth of the bureaucratic or regulatory sector of government can best be explained in terms of the competition between political agents for constituency support through the use of promises of discriminatory transfers of wealth.”
• “It is necessary to appreciate the prevailing mindset of social scientists and philosophers at the midpoint of the 20th century when public choice arose. The socialist ideology was pervasive, and was supported by the allegedly neutral research programme called ‘theoretical welfare economics’, which concentrated on identifying the failures of observed markets to meet idealized standards. In sum, this branch of inquiry offered theories of market failure. But failure in comparison with what? The implicit presumption was always that politicized corrections for market failures would work perfectly. In other words, market failures were set against an idealized politics…[P]ublic choice became a set of theories of governmental failures, as an offset to the theories of market failures.”
• “A more provocative criticism of public choice centres on the claim that it is immoral. Critics argue that people acting politically -for example, as voters or as legislators-do not behave as they do in markets. Individuals are differently motivated when they are choosing ‘for the public’ rather than for themselves in private choice capacities… Public choice…incorporates the presumption that persons do not readily become economic eunuchs as they shift from market to political participation. Those who respond predictably to ordinary incentives in the marketplace do not fail to respond at all when they act as citizens.”
• “In other words, governments everywhere overreached. They tried to do more than the institutional framework would support. This record of failure, both in the socialist and welfare states, came to be recognized widely, commencing in the 1960s and accelerating in the 1970s…[P]ublic choice exerted major influence in providing a coherent understanding and interpretation of what could be everywhere observed. The public directly sensed that collectivistic schemes were failing, that politicization did not offer the promised correctives for any and all social ills, that governmental intrusions often made things worse rather than better.”

James Buchanan died on January 9th at age 93.

I love graphs as much as the next guy, but I’ve squished what you need to know about the labor market into three graphs, courtesy of the St. Louis Fed’s FRED database.

I’ve said before that it annoys me when the single piece of data the news media uses to assess the economy is the unemployment rate, which is subject to misinterpretation, misunderstanding, and survey error. Much better to look at real (and per capita) GDP, net private investment, the inventory-to-sales ratio, or even basic indicators like the Conference Board’s Leading Economic Index. These all reflect actual business activity of production and sales.

It needs to be constantly stressed that jobs are the result of economic activity, not the cause. If we wanted to put people to work it would be extraordinarily easy: instead of yard guys using riding mowers, string trimmers, and blowers, use scissors and brooms. “But,” you say, “they wouldn’t get as much done!” Ah, true, but to maintain the same amount of business the company would have to hire a lot more workers, right?

So, our priority should not be on whatever policy or program will increase jobs, but on what will increase economic activity and entrepreneurship. Do that, and the jobs will come.

But, it’s useful to watch the labor market as a lagging indicator of the economy, so here are my promised three graphs:

1: Population & Labor Force. Over the past decade, the US population (blue line, left axis) has steadily increased as expected. In an economy operating normally, the number of people willing and able to work (the labor force, red line/right axis) would increase at a similar rate. But, as you can see, since the recession (gray area) began around 2008 the number in the labor force has stalled. In other words, an increasing number of people in the population are deciding (whether they want to or not) to not look for work. (It is possible that an increasing number of people in the population are not able to work too.) This is verified by

2: Labor Force Participation Rate & Not in the Labor Force. The participation rate (green line, right axis) is the percent of the civilian noninstitutional population that is in the labor force. It has tumbled about three percentage points and doesn’t appear to be turning up. This means that more people are out of the labor force (red=men, blue=women, left axis; FRED doesn’t have total not in the labor force), which can be seen by the increased rates of the red and blue lines. Why are people leaving the labor force? They could be retiring, they could be choosing not to work because a spouse has a steady job and they are satisfied with a single income, or (as is more likely) they could have given up looking for a job. In which case, they drop out of the labor force.

Be aware that the unemployment rate only reflects people in the labor force; it is the percent of people in the labor force who are not working for pay at least one hour a week. If a bunch of people decide that their job prospects are so crummy that they stop looking, they stop being unemployed and they stop being in the labor force. So what about the number of people remaining in the labor force? Graph #3 tells the story:

3: Total Nonfarm Employees & Total Unemployed. In my above example where unemployed people leave the labor force, the unemployment rate would actually decrease (usually indicating good times) since the drop in the numerator (# unemployed) would be relatively larger than the drop in the denominator (# in labor force). So, this percentage can move in unusual ways and should be interpreted with caution. For a clearer picture, we can look at the actual numbers of people employed and unemployed.

Doing that, we see that the number of employees (blue line, left axis) is about 4.5 million below the 2008 peak. While it took two years for employment to fall 9 million, the following two years have only made up half of the drop. The total number of unemployed people (red line, right axis) has risen from its past-decade low of about 6.7 million in Oct. 2006 (and stayed around 7 million until Dec. 2007) to about 15.4 million three years later, and stands at about 12 million in Sep. 2012. While it took three years for the number of unemployed to increase about 8.7 million, in the following three years it only dropped about 3.4 million.

Say what you will about the present administration inheriting a recession (one fueled in part by government policies strong-arming banks to increase homeownership rates, hence loosening lending requirements) of which it had no part; the evidence strongly suggests that it has done little to boost the labor market even after the recession bottomed out. You might cut a President some slack in letting unwise investments get liquidated and the recession to run its course, but the test of an administration’s economic policies should then be judged by the pace of the recovery.

Let me be clear: there is precious little that President Obama or a President Romney can do to “fix” the economy other than to get out of the way. Programs, special favors, cheap shots at China, none of those things accomplish anything of substance other than to shuffle jobs around. Jobs are created after business activity is encouraged, which itself is done by reforming institutions to better favor economic growth. The recipe for success isn’t difficult, either:

In the last 10 years, both African and formerly Communist nations—such as Rwanda, Malawi, and Ghana, and Romania, Bulgaria, and Albania—show the largest increases in economic freedom. Countries showing the biggest declines since 2000 include Venezuela, Argentina, Iceland, and the United States.

Economic Freedom falling in the US

I have to throw distributism in that category too. I’m certainly sympathetic to the Catholic underpinnings of the movement, and realize that virtually everyone, no matter how unorthodox his proposal, wants to promote both material and spiritual well-being among mankind. And, sure, Chesterton and Belloc are great writers; but economists they ain’t. Ultimately, theory has to meet reality.

From what I can gather, distributism basically envisions a system of smallness and (therefore) self-sufficiency. So, in that sense distributists can attract followers weary of political mudslinging since they rise above modern liberal-conservative clashes with their dislike of both big business and big government. They can also cater to the American desire for self-determination and autonomy.

I have to pause here and wonder why distributism is so favored among Catholics. Distributists don’t like Big Business or Big Government, so why would they like Big Church? If they don’t like all businesses being monopolized or state power being centralized, it seems that they shouldn’t want there to be one flock and one shepherd. Also, when our faith stresses our complete and total dependence on God and His grace, it seems odd to hold up self-sufficiency as the highest ideal. Would monks who seek alms on which to live be the antithesis of distributism?

If we do recognize our dependency on God, it would seem that two more appropriate philosophical outlets would be either an authoritarian state or free markets. With those, our needs are provided interdependently with others either by force via the state, or voluntarily via markets.

But, onto the practical problems with smallness and self-sufficiency. If smallness is sought for both business and government, I don’t see how this could be enforced. To prevent small businesses from becoming big, some state-level enforcement apparatus would have to exist to monitor company size and impose penalties. This would necessitate an agency at least larger than the Census Bureau or Bureau of Labor Statistics, which now only samples a portion of businesses. You would inevitably run into problems of lobbying and special interests seeking to allow one’s own business to grow a little bigger than usual, and to prevent competitors from growing too big.

But maybe not, because enforced smallness would eliminate many things that businesses now do, lobbying being one. While society likely wouldn’t suffer much with fewer lobbyists in the world, enforced smallness would likely decimate private research and development. If Merck or Pfizer are forced to reduce their size and sales, from where would money come to research new drugs? There would be a rapid reduction in technological improvements and economic growth, but maybe that’s the point of the movement.

Distributist literature emphasizes guilds as a way to monitor industries and their firms and protect consumers. They may, but industry groups and occupational licensing have a long track record of discouraging new (and small!) entrants. In Louisiana, you need a license to be a florist or sell caskets; if the goal is many small firms, it isn’t clear how erecting barriers to entry will accomplish this.

The larger flaw in the “smallness” approach is a lack of appreciation of what are called “economies of scale.” Sure, some businesses and industries do very well when each firm is quite small: barber shops, law firms, accountants, real estate agents, etc. But envision what it would mean to have a firm of that size that produced, say, cars. Could a 20-employee car company exist? Sure, and the cars it produced would be astronomically expensive. Why are car companies so big? Because they can take advantage of large-scale production techniques that are efficient and feasible in car production but not in cutting hair. Not allowing firms in particular industries to take advantage of economies of scale would result in much more expensive products, but maybe that’s the point of the movement.

To encourage self-sufficiency, distributists advocate a wide distribution of private property, and discourage accumulation of property in too few hands (they wanted to occupy Wall Street before it was cool!). It isn’t clear, though, that most people even want to be self-sufficient, regardless of the high esteem that some people accord this virtue. I’m not talking about welfare recipients either; we dislike self-sufficiency because it’s so difficult and inefficient. The distributist mentality flies in the face of the concept of specialization, the idea that you do what you’re good at, I’ll do what I’m good at, and we can trade to obtain things we’re not good at individually. In a distributist world, would I have to make my own food? If I could rely on others, is there a geographic limit within which I am allowed? If I tried to buy Florida orange juice but lived in Montana, would I have to get it on the black market? Presumably a large company like Tropicana or Minute Maid would not be allowed due to their bigness.

I enjoy not being self-sufficient. Instead of having to spend time and effort farming my family’s food (which I would be terrible at), I can spend a relatively little amount of time and effort doing what I’m highly skilled at and enjoy, get paid for it, and have way more than enough money to afford my family’s food. I don’t see how life can in any way be made better by preventing people from doing what they enjoy, and forcing them to do what they detest. There is a reason why material well-being increases with the division of labor.

From what I can see, distributism not only lacks a knowledge of economic fundamentals, it seems to pride itself on this. Seen as a product of the Enlightenment liberalism, distributism rejects the free market philosophy that has, since Adam Smith, improved the lives and health of billions of people. If distributists don’t like the morality demonstrated by people in free markets, they need to address people’s morality, not try to tear down the market. Doing the latter will only make us all poorer. But maybe that’s the point of the movement.

Dan takes issue with my critique of Bishop Blaire’s Labor Day Statment and with what I perceive as the Church’s misunderstanding of labor versus other factors of production. He believes I “elevates conservative economic doctrine higher than Catholic social doctrine;” he later recognizes consistency between Marxist and Catholic views on just wages, not because the Church agrees with Marxism but because Marx agreed with the Church. I might adopt the same approach and suggest that economists don’t necessarily agree with conservatives but conservatives tend to agree with basic economic principles more so than liberals, progressives, populists, greens, etc. There are certainly conservative economic positions that virtually all economists would reject: trade and immigration restrictions, massive subsidies to domestic industries, and other xenophobic policies that (don’t really) help American companies at the expense of foreign companies.

Adam Smith

I said nothing in my previous post that would be considered outside of mainstream economic thought. It is all standard microeconomic theory and can be easily verified by looking at, say, the textbook we use in my micro principles class (whose authors can hardly be characterized as hard-core conservatives).

I certainly support and defend Catholic dogma, but I’m unaware that the Church’s teaching on a living wage requires the same degree of assent as Her teaching on the Real Presence, the Trinity, or the Assumption. Indeed, some of our Bishops recognize the limitations of their economic expertise.

As to Dan’s two key points:

1. “Labor has primacy over capital.” We think of capital as impersonal machinery, and would rightly fault a business that chose to replace all of its two-year old but perfectly functional and efficient computers with brand new (and unnecessary) ones instead of using those funds to augment salaries. But recall that capital equipment itself is produced by laborers, and its purchase by companies is typically financed by savers being frugal, so reducing the reliance on capital will itself harm laborers and other people who make capital available. Capital makes labor more productive; the reason a backhoe operator gets paid more than a guy with a shovel is precisely because of the capital. I.e., if we want to increase the chances that people will get paid at or above a living wage, we need more capital, not less.
2. “It is appropriate and just to pay someone based on their needs, not merely their production.” It may be appropriate and just, but as I argued earlier, it is unrealistic in certain circumstances and may in fact be unjust. In my earlier post, see the examples of the two teenagers, Alan and Bob. As another (extreme) example, say that my brother opens a business that sells mud pies and he hires me, a lazy guy who just sits around at work all day blogging. Should he pay me based on my needs (main breadwinner to my wife and two sons)? It would be wonderful if he could, but realistically he won’t be able to because no one wants to buy mud pies (so the company gets no revenue to pay wages), and I am not contributing anything to the production of the business (so whatever he would pay me would come out of his or other hardworking employees’ pockets, an injustice to them).

Dan asks later “do you believe that revenue and price considerations are all that matter?” No, but it’s hard to pay a living wage if you have no revenue. Avoiding financial realities is a surefire way to doom a company, leaving its employees without jobs. “[D]oes work…have a subjective dimension that goes beyond that?” Yes, aside from the productivity of an employee, an employer certainly should consider that employee’s work ethic, loyalty, ability to get along with others, creativity, and lots of other subjective characteristics in determining their salary.

“[D]o you back a doctrine developed over better than a century by an array of popes, or one pieced together by a slew of intellectuals at conservative think tanks?” This neglects the largely free-market economic thinking of the medieval scholastics at Salamanca, but even if we consider 1891 to be the beginning of Catholic social thought, Rerum Novarum is still preceded by the Wealth of Nations and thinkers like J.B. Say, David Ricardo, and Bastiat. The economics Dan criticizes is not a modern ultraconservative offshoot devised by cigar-smoking intellectuals in dimly-lit offices of the Heritage Foundation or Cato Institute; it is mainstream economics. (Most economists, by the way, lean Democrat, and the premier international association, the AEA, certainly is left of center).

Raged against the machine before it was cool

The main point in my previous post was to demonstrate that all factors of production (land, labor, capital, entrepreneurship) essentially relate to persons, and therefore all of these persons have a right to justice in economic relationships. Land is owned by landowners, who deserve justice in being compensated for their contributions in production. Capital is made by laborers and financed by savers, so if you rage against the machine at least don’t rage against the people who make the machine and the laborers who are more productive because of the machine. Entrepreneurship involves people who use their creativity and foresight, while taking considerable risk and usually delaying any compensation for themselves for years, to produce goods and services that make customers’ lives better.

Catholic social teaching develops, as it has since 1891. My hope is that, going forward, it gets away from the antiquated notion of a constant struggle between laborers and rich capitalists with their machines, and recognizes the reality that economic relationships are relationships between persons, all of whom deserve justice and respect no matter their role.

Thus he spake:

[L]ook, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.

Let’s look at this in pieces.

“[L]ook, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.”

No, not strictly on your own. You did have to find customers. You had to find people who wanted what you were producing and valued it at the price you set for its sale. If you didn’t find them, and they didn’t find you, you could not become successful. Eventually you also likely needed an employee or two. But neither of them took the risk to make the business happen—you did. And while they would be out of a job if the business foundered it wasn’t their life savings and maxed out credit cards on the line, or their butt in bankruptcy court. You, if you were to be successful, could never vote “present.”

“I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.”

Indeed, there are. Some even get elected to high office they don’t deserve. But not all smart people work their tails off to make a business successful. A whole lot of them waste their smarts, or are content with whatever comes their way. Or have no idea what it takes actually to be successful, try as they may.

“It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.”

True, there are. But not all people who work hard take the risk to start their own business. And lots of people who “work hard” are paid time and a half for anything beyond the first 40 hours of hard work. Any entrepreneur who figures out a way to work fewer than 40 hours per week and become successful has bottled lightning and could make a mint selling that.

“If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.”

Possibly, but was that great teacher great only for that person? Or was that great teacher great also for all the people who did not go on to start their own successful business? I’ll bet on the latter. So that’s not a point in his favor.

“Somebody helped to create this unbelievable American system that we have that allowed you to thrive.”

In fact, a lot of somebodies did—from the Founding Fathers on through to today. And the system that allows private individuals to thrive is the one that puts the fewest unnecessary barriers in the way of innovation and does the least to dissuade investment.

“Somebody invested in roads and bridges.”

Right: the business owner also invested in the roads and bridges, likely well before he was successful. And those are the same roads and bridges that everyone uses, including those who did not start successful businesses. So that’s not an argument in his favor.

“If you’ve got a business — you didn’t build that.  Somebody else made that happen.”

See, this statement is simply wrong, and patently offensive (the National Federation of Independent Business and others have had some great reactions). Lots of people have the same conditions as those who start successful businesses—education, public infrastructure, government-guaranteed loans, etc. But only a very few actually take the risk and try to start their own business, and then only a small part of those actually become successful—most fail. No one else “made that happen”—the thought is simply illogical. If you found the business then it is founded because you founded it. Nameless, theoretical “Everyman” didn’t found it: you did. If it is successful there are undoubtedly various factors that you did not personally set up that played a role, e.g., favorable and predictable tax and regulatory scheme, laws that enforce contracts, competition that does not catch up, etc., but none of those is “government hand-out” or “we’re all in this together” in any way beyond buying and selling. And none of it would matter if you had not founded the business and guided it through the government regs and market forces to success.

Obama’s overall point was, in essence, “we’re all in this together,” and a version of “a rising tide lifts all boats.” That’s nice language, and it’s not wrong, but the government does not make it happen. The money to pay for the public school teachers, the roads, and the bridges did not come from thin air or, historically, loans from China. The tax revenues that made this country what it is came from the historically unprecedented wealth-generating dynamo of American ingenuity and private enterprise. Private individuals created wealth, transactions happened freely, thus giving the government a tax base, enabling the bridges to be built and teachers to be paid. The improved infrastructure contributed to further development of enterprise and even greater returns on investment, but that did not magically put the government ahead of private activity in wealth creation.

That Obama imagines it does and governs with such reckless disregard to the effects his policies have on small business and individual liberties, bodes very badly for American ingenuity and liberty if he is reelected.

Barack Obama has been an Ivy League student of dubious record; a community organizer who associated with committed socialists, unrepentant terrorists, and a virulently anti-American pastor; a part-time law professor; a state legislator who won by getting his opponents kicked off the ballot, personally blocked the Born Alive Infant Protection Act and mostly voted “present;” a one-term U.S. senator who won when his opponent’s court-sealed divorce proceedings were mysteriously leaked, and then spent most of his Senate term running for President; and a wildly divisive President who spends most of his time raising money, golfing, and blaming others for his failures. He’s never actually accomplished or built anything: how or why should we expect him to think anything else?

——–

P.S. A wonderfully terse piece that shares some facts I did not have at my finger tips on this same subject is available at the Washington Examiner. One of the money quotes: “Only someone who has never signed the front of a paycheck could make such an ignorant comment.” Read the whole thing.

Precisely when the G20 summit in Cannes was coming to its weak and uncertain conclusion, on that same Friday, November 4 at the Vatican, a smaller summit convened in the secretariat of state was doing damage control on the latest of many moments of confusion in the Roman curia.

In the hot seat was the document on the global financial crisis released ten days earlier by the pontifical council for justice and peace. A document that had disturbed many, inside and outside of the Vatican.

The secretary of state, Cardinal Tarcisio Bertone, complained that he had not known about it until the last moment. And precisely for this reason he had called that meeting in the secretariat of state.

The conclusion of the summit was that this binding order would be transmitted to all of the offices of the curia: from that point on, nothing in writing would be released unless it had been inspected and authorized by the secretariat of state.

Liberal Catholics were quick to try to claim this document somehow represented the authoritative teaching of the Church (and Pope Benedict himself), and attempted to criticize orthodox Catholics who accurately presented the document as enjoying little authority as somehow being “cafeteria catholics.”

Well, the ball is back in their court now, and I (and others) haven’t changed our position. The additional reporting by Magister only make more clear how right we were in our analysis:

“…what has been even more irritating for many authoritative readers of the document of the pontifical council for justice and peace is the fact that it is in glaring contradiction with Benedict XVI’s encyclical “Caritas in Veritate.”

In the encyclical, pope Joseph Ratzinger does not in any way call for a “public authority with universal competency” over politics and the economy, that sort of great Leviathan (no telling who gets the throne, or how) so dear to the document of October 24.

In “Caritas in Veritate” the pope speaks more properly of the “governance” (meaning regulation, “moderamen” in Latin) of globalization, through subsidiary and polyarchic institutions. Nothing at all like a monocratic world government.

When one then delves into the analyses and specific proposals, it is also stunning how strong the divergence is between what is written in the document of the pontifical council for justice and peace and what has been maintained for some time in the financial commentaries published in “L’Osservatore Romano” by Ettore Gotti Tedeschi, president of the Institute for the Works of Religion, the Vatican bank, also chosen for his post by Cardinal Bertone.

… It was easy to predict that Gotti Tedeschi would not remain silent. And in fact, on November 4 – the same day as the summit convened by Bertone in the secretariat of state – “L’Osservatore Romano” published an editorial by Tedeschi that reads like a complete repudiation of the document of the pontifical council for justice and peace.

Magister goes on to reproduce the entirety of Tedeshi’s editorial criticizing the Justice and Peace white paper. (I’ve showcased Tedeshi’s excellent analysis of economic topics on these pages before.)

It’s clear from Magister’s reporting that the consternation over the document is shared not only by orthodox Catholics here in the U.S., but also by top curial officials within the Vatican. The secretary of state Cardinal Bertone has “disowned” it, the L’Osservatore Romano “tears it to shreds” and from now on, any new text issued by Justice and Peace will “have to be authorized in advance by the cardinal.”

The publication of this document, if anything, showcases the influence in Justice and Peace of outside progressive economists/thinkers (such as Professor Leonardo Beccheti, whom Magister and I have mentioned as the likely author of the most flawed aspects of the document) as well as mismanagement of how the pontifical council is run and overseen. It does not represent an example of Pope Benedict’s authoritative teaching office, as I and others said from the outset.

So, for all the liberal Catholics who tried to claim that this white paper represented the thought and position of the “Vatican” and Pope Benedict, what do you have to say now?

Once again, we see that orthodox Catholics didn’t twist and misrepresent the Church’s teaching on an important issue … liberal Catholics did.

It’s time for liberal Catholics to own up to their mistaken interpretation of this white paper. I’ll be waiting.

It took this story out of Canada to help me connect the dots:

Organizers of the Occupy Vancouver movement almost took over the Holy Rosary Cathedral in downtown Vancouver on Sunday morning.

Vancouver Police stopped the protesters from disrupting Mass at the Catholic church. A spokesman for the group, which renamed itself Occupy Vatican, said the purpose of the aborted church takeover was to bring to the Catholic Church’s attention the thousands of residential school survivors who suffered under the clergy.

…Vancouver Archbishop Michael Miler anticipated the march of protesters and requested extra police protection outside the cathedral to prevent the disruption of the Mass.

What’s the Occupy the Vatican movement? They have about 3,500 supporters on Facebook. They are allied with groups such as “STOP the Missionaries of Charity” (“Holding Mother Teresa’s charity accountable for their monumental medical negligence and financial fraud”), “Freedom From Religion Foundation”, “Religion Poisons Everything”, “Hell Does NOT Exist – It Is A Lie to Control Victims With Fear” and literally hundreds of other angry lefty causes.

I saw an informal poll last week (but can’t find it now — if you spot it, please drop me a line) that a vast majority of the occupy wall street (OWS) protestors are self-avowed atheists. Now this is interesting when one considers how many in the media are trying to claim that the OWS movement is the lefty equivalent to the Tea Party. That comparison actually makes sense considering the Tea Party is overwhelmingly Christian.

More importantly, I can never remember a Tea Party rally that explicitly was anti-religion, anti-Christian, anti-Catholic, or anti-institutional religion. In fact, the Tea Party movement, broadly speaking, supports the freedom of religion and the freedom of religious people to bring their moral values into the public square.

That’s just the opposite from what I’ve seen in the Occupy Wall Street and similar lefty protests. There is an unmistakeable anti-religion (and especially, anti-Catholic) streak that runs through the movement. No, I’m not claiming that the OWS movement is entirely made up of these elements, I’m just saying these anti-religious elements are at home with the OWS movement, and they simply do not find a home with the Tea Party movement.

That’s revealing. Why? Because once again we find that efforts to claim that the OWS movement is “supported” by Catholic teaching originate exclusively from lefty Catholics (such as Catholics United and Faith In Public Life).

Paradoxically, lefty Catholics tell us that the Catholic Church has more in common with the OWS movement, even though the OWS movement is more cozy with anti-religious sentiment than with the Catholic Church. What does it say about liberal Catholics that they find their strongest supporters and activists not in Church pews, but in the encampments of Occupy Wall Street and Vancouver?

Here’s the false premise that lefty Catholics use to claim affinity between OWS and Catholic Teaching: “Because the Church and the OWS agree that society, politics and the economy are broken and imperfect, they must also agree about how to solve these serious problems.”

Of course Catholic teaching and the OWS demands (whatever they are) do not agree. For one, the Catholic Church defends her right to speak out for truth in the public square, and believes in her own institutional freedom and autonomy. The Catholic Church strongly proclaims the dignity and right to life of the unborn (and all people) as the foundation for a free and just society. The Church continually upholds the dignity of marriage as the fundamental building block of a healthy society. Most individuals in the OWS movement strongly deny all of these principles.

I would have extremely serious reservations about supporting the Tea Party movement (or conservative politics in general) if it continually argued against religious liberty and supported anti-Catholic elements, or if it also worked to promote abortion and redefining marriage and family. These things, for me, are deal-breakers.

Apparently, however, lefty Catholics don’t have a problem associating with a movement that regularly promotes anti-Catholic elements and aggressively acts to erode religious freedom (personal and institutional), and categorically disagrees with the Church on the other issues I mention.

That tells us something about the Occupy Wall Street movement, and it also reveals to us something deeply troubling about the lefty Catholic supporters of the OWS project.

Then again, if a Tea Party rally recently tried to invade a Catholic Church during Mass, destroyed a statue of the Virgin Mary, and if the OWS protestors have recently pledged to promote a culture of life and uphold the sanctity of marriage, let me know. Maybe I don’t have all the facts.

My thoughts about it are here and here.

Here’s the best of what I’ve read from others on the topic.

Mark Brumley, Editor of Ignatius Press:

If the Pontifical Council for Justice and Peace is trying to make the Catholic Church sound as if she’s living in a fantasy world or trying to portray Catholic social teaching as completely irrelevant to real world problems, I’d say, “Mission accomplished.” If, on the other hand, the council wants people seriously to think about the problems of globalization, it’s going to have to demonstrate a much better grasp of political and economic practicalities, as well as the limits and dangers of international solutions.

Phil Lawler at Catholic Culture:

When people reach the conclusion that the Vatican is talking nonsense, they do not ordinarily distinguish between the sound fundamental principles of Church teaching and the questionable economic analysis that follows. Nor do they make fine distinctions on the different levels of Church teaching authority. They conclude simply that the Vatican talks nonsense. So by reaching beyond their field of expertise, Vatican officials undermine their own teaching authority.

John Allen, Vatican expert:

Focusing on how much papal muscle the note can flex, however, risks ignoring what is at least an equally revealing question: Whatever you make of it, does the note seem to reflect important currents in Catholic social and political thought anywhere in the world?

The answer is yes, and it happens to be where two-thirds of the Catholics on the planet today live: the southern hemisphere, also known as the developing world.

This intriguing thread via Fr. Z at WDPTRS about one of the men who may have contributed to the document’s drafting:

I have some Italian friends who are very well-informed about the topics addressed in the “white paper”.  One of them, a sometime contributor here and a mainstay of the Catholic Online Form, the great Fabrizio, offered some observations on Prof. Becchetti [who was present at the PCJP press conference]:

… “[He's] A socialist economist, a left-wing “Catholic” who’s extremely active with the Democrat Party (formerly known as Partito Comunista Italiano [...]

Among other things this guy formed a lobby to request the EU to levy crazy taxes on financial transactions which will destroy whatever is left of available capitals, especially for small businesses and small investors, with a trickle-down effect that will further damage an economy brought to collapse by socialist greed for power, money and control.

So basically a Vatican dicastery helped a socialist ideologue to advance his agenda with the imprimatur of the Holy See (obviously he is the ghost writer of the part on financial transactions).

Rick Garnett at Mirror of Justice:

I think (a) many are (perhaps strategically and tactically) mis- and over-reading the Note in order to overstate the consonance between its vision and the current policies of the Democratic Party in the United States and its special-interest constituencies; (b) many are making the mistake that was widely made with respect to the Pope’s Caritas, i.e., imagining that the Church proposes a list of “economic policy proposals” that can be conveniently lifted, to the extent they strike the lifter as attractive, without any attached moral anthropology (which might, in turn, come with some unwelcome implications for, say, religious liberty, the family, education, etc.); and (c) it is a mistake to think that the Note, with its focus on world-wide financial markets, somehow baptizes our and other governments’ current overspending, or the self-interested (dare we say “greedy”?) and damaging positions being staked out by, e.g., public-employee unions.

Jimmy Akin of Catholic Answers:

I raised my eyebrows at the claim that a “major” document would be released by the PCJP. As a Council, it occupies a place (and not the first place) on the fourth tier of dicasteries, and it’s not the kind of department that is used to issue “major” documents in terms of the overall sweep of things at the Vatican. A given document may be major compared to documents the Justice and Peace council normally issues, but under ordinary circumstances they won’t be major compared to documents issued, say, by the Congregation for the Doctrine of the Faith, or the Congregation for Divine Worship and the Discipline of the Sacraments—or the pope himself.

Sean Dailey at Crisis Magazine:

And despite all the talk about easy credit, lending, and international trade, the Note makes no mention of ruinous deficit spending by governments. There is not a single mention of the crippling, mounting debt that governments, particularly Western governments, continue to run up. On the contrary, “Towards Reforming” suggests “taxation measures on financial transactions” and, euphemistically, “forms of recapitalization of banks with public funds.” In other words, more taxes, and more spending, including bank bailouts. How has that worked so far?

Richard Viguerie at NewsMax:

Unfortunately, by choosing the discredited United Nations as the vehicle to implement its call for a more just world economy, the Vatican statement demonstrated a distressing lack of connection with what has really gone on at the United Nations.

Gone would be the constitutional protections of freedom, life, and property that Americans now enjoy. In their place would be rules set by a new world governing body run by countries like Iran, Cuba, China, and Saudi Arabia.

If the United Nations Commission on Human Rights is any indication, implementing the Vatican statement would achieve exactly the opposite of the desired result.

What do you think?

And, as a bonus, for those of you who read this far, a CNN segment asking the question “would Jesus occupy wallstreet?”. Notice, in particular, the claims that are made about the Vatican and the pope:

Ph/t: Creative Minority Report.