Saturday, November 27, 2010

How Do We Best Share?

The picture in the Saturday, November 13th, Wall Street Journal of a baby with cholera was heart-rending. The text in the article, "Aid Spawns Backlash in Haiti" (by Jose de Cordoba) was ominous:

"After January's devastating earthquake, there was hope the hospital could turn things around....Ten months later, the foreign doctors and charities are gone. The intensive care unit is closed. An unused defibrillator and a cardiac monitor lie askew atop a cart. Nobody at the hospital is trained on how to use either piece of equipment."

How can this be? Has Haiti become another one of those places in which wealthy people shower the victims of a natural disaster with immediate aid, only to abandon them when the headlines a few weeks or months later turn to the next earthquake or tsunami or the next season on American Idol? Weren't we all supposed to be treating Haiti differently?

Well. after you get further into the story, you see that things are, indeed, different in the case of Hiati. The opening paragraph was a description of a large government-run hospital. Inside, you see pictures of a sparkling new obstetrics unit at another hospital, run by a private charity. The point of the article is not that private charities have abandoned Haiti, but rather that the medium-run equilibrium continues to be that foreign charities largely bypass the Haitian government facilities and concentrate on more direct avenues of provision, including their own clinics and hospitals.

The article highlights both sides of the resulting argument. de Cordoba writes: "Critics say the NGOs have put Haiti in a Catch-22: By building a parallel state that is more powerful than Haiti's own government, aid groups are insuring Haiti never develops and remains dependent on charities." For example, the moral value of the NGOs of paying employees a good wage had the side effect of hiring the most well-trained personnel away from the government hospitals.

On the other hand, the author notes that the NGOs have cured, fed, housed, and educated many people and, contrary to the fear that I expressed in the opening paragraph, many seem dedicated to remaining in Haiti for years if not decades. So a counter-argument might go something like this: Who says that Otto Von Bismarck's model of a centralized welfare state has to be the only model for compassion in a country such as Haiti? If the socialized medical system of one of the most dysfunctional governments in the world is a failing model, so be it, if (and that's and important if) the ultimate result is an improved quality of life for the people of Haiti.

It seems to me that there is an important argument about finding a path so that the people of Haiti are eventually not perpetually dependent on "the kindness of strangers," especially when that means the kindness of non-Haitians. But nothing says that has to be through a return to a traditional government owned and operated health care system. Therein lies the uncertain path for NGOs and those of us who support them.

Sunday, November 14, 2010

Joyful, Joyful, We Adore Thee

My friend Brad Hansen once preached on the difference between happiness and joy. I think the following is an example.

I'm happy that the FSU Seminoles came from behind to beat the Clemson Tigers last night.

On the other hand, I would like to thank the Clemson marching band for making it such a joyful evening. First, they not only traveled to support their team and fans, but they prepared a halftime show for their guests. Secondly, their halftime show, a tribute to great music of the past, opened with the classic hymn "All Creatures of Our God and King." The second tune was the theme from Beethoven's symphonic ode to joy, which of course became the adapted tune for the hymn "Joyful, Joyful, We Adore Thee."

So, in the midst of this 80,000 person secular worship that we call American College Football, there were at least four people on their cellphones dialing up the lyrics, authors, and stories of Great Hymns of the Church.


Thursday, November 11, 2010

Of Interest

One of the most repeated prohibitions in the various laws of the Old Testament is the prohibition against usury? But what is usury? Is it the charging of any interest? The charging of discount points? The charging of interest on loans to the poor? The charging of any loan terms that are disadvantageous to the poor?

At this link is a very well done, even handed, look at attempts to regulate out of existence the modern institution of payday loans. Here are two fundamental points for debate. First is: "Are payday loans usury?" My initial reaction was "of course" until I considered the matter further. Now I'm not so sure. It appears that the usurious interest rates estimates come from taking the total fee for a short term loan (say two weeks) and annualizing that amount. But how much of that fee represents the time value of money (the pure rate of interest), how much of it represents a fee for the direct costs of the business, and how much of it represents a risk premium for the very real threat of borrowers skipping out on the loans? Apparently, the overall return to payday loan companies is a rather unspectacular 10%.

Secondly, if we do conclude that payday loans are usury, should Christians be in favor of banning them, much like the height of the social gospel movement when Christian voters banned drinking, dancing, and shopping on Sunday? Should we consider the evidence that when payday loans are put out of business, poor people turn to other avenues such as over-drawing their checking accounts and paying penalties, or worse? What are the parallels (or not) between the arguments for governmental prohibitions against payday loans and governmental restrictions against abortion. I hear some Christians say "I am anti-abortion but pro-choice." Should the same standard apply to payday loans: "I believe that payday loans are immoral but I believe that poor people ought to have that choice." But, if we argue against banning payday loans, what can we do, as Christians, to help poor people have other options when, as the video spot asks, the transmission in the car breaks down and they need that car to get to their job?

Wednesday, November 10, 2010

Person vs. Structure

I've been delinquent in my promised posts about what happens to the displaced people if they could no longer afford their homes due to capped housing subsidies; however, with good reason. Yesterday I finished up my monster linear algebra test, which hopefully turned out well. Anyway, a couple of weeks ago Mark handed me an article from the NY Times titled Culture of Poverty Makes a Comeback.

This reading spurred the Economics and Moral Sentiments Readings Group to take on the classic Moynihan Report which has been a very controversial article since it was written in 1965 by then Under Secretary of Labor for LBJ. The Moynihan Report acknowledged that Black Americans had a long history of oppression through slavery and "separate but equal" and their new freedoms afforded through the Civil Rights Act would be challenged by residual prejudice. However, that was not controversial. The controversial part of the report was that the greatest challenge to Black Americans would be the disadvantages they were creating for themselves because of the deterioration of their family structure.
There is no one Negro problem. There is no one solution. Nontheless, at the center of the tangle of pathology is the weakness of the family structure

At the time nearly one-quarter of all Black Americans were born out of wed-lock. This disadvantaged them because that meant less purchasing power in the family. This also meant the children were less likely to attend a quality school or have parents that were actively involved in their lives. The statistics are still high amongst Black Americans at 72% (this recent report from Yahoo! News speaks to that); however, children born out of wedlock now exceed 40% of all children born in the United States ---this is a post for another time.

What is driving what Moynihan called "The Tangle of Pathology"? Moynihan spoke of poverty as a cultural problem. In poverty, he wrote that children are, "Constantly exposed to the pathology of the disturbed group and constantly in danger of being drawn into it."

This is where the article about the culture of poverty comes in. Recently the sociology profession has come under fire for falling in love with structuralist explanations of human behavior. See Jonathon Imber's article here. And, the people at OrgTheory blog provide some nice links and background explanation) Structuralism looks at social organization and says that decisions people make are mostly a function of their environment and situation. In fact, people might make these decisions because they have poor values and priorities -not a just a bad environment.

Saturday, November 6, 2010

The Protestant Ethic

I want to elaborate on a point that Doug raised below, namely, about whether we value people in society less when they earn a low wage. Recently, I've been doing some reading on the issue of the "Protestant Ethic" which comes up repeatedly in the "culture and values" readings we've been doing in the Theory of Moral Sentiments Readings Group. There are a lot of people who use the term "Protestant Ethic," but what ethics about economic life did the Protestant Reformers really have?

This is a large topic, because there's no doubt that the Reformers thought a lot about issues in what we might call today the marriage of ethics and economics. Typical is John Calvin, who tackles the ethics of personal consumption in his Institutes on the Christian Religion. In the part of his book dedicated to the life of the Christian, Calvin offered rapid-fire the following analysis. I'm going to summarize his ideas, but not offer a lot of commentary here.

From Book III, Chapter X :"How to use the present life, and the comforts of it."

1 ) Calvin rejects the extremes of asceticism on the one hand and of unbridled license to excess on the other.

2 ) He asserts that God has given tastes and smells and colors for our enjoyment.

3 ) "Where is the gratitude if you gorge yourself with feasting and wine as to be unfit for offices of piety, or the duties of your calling? Where recognition of God if the felsh, boiling forth in lust through excessive indulgence infects the mind with impurity?... Where thankfulness to God for clothing, if on account of sumptuous raiment we both admire ourselves and disdain others?"

4 ) "He who makes it his rule to use this world as if he used it not, not only cuts off all gluttony in regards to meat and drink, and all effeminacy, ambition, pride, excessive show, and austerity in regards to his table, his house, and his clothes, but removes every care and affection which might withdraw or hinder him from aspiring to the heavenly life, and cultivating the interests of his soul."

5 ) Christian liberty admits of no strict laws, but it must be our constant aim "not only to curb luxury but to cut off all show of superfluous abundance, and carefully beware of converting a help into a hindrance."

6 ) He argues that envy and sumptuousness are two sides of the same coin...that it is the same value system that causes us to be annoyed when our clothes are frayed as when we are vain that we are wearing a splendid garment.

7 ) Scripture declares that all of our gifts come from God, and are appointed for our use as under a kind of trusteeship. "We must therefore administer them as if we constantly here these words sounding in our ears: 'Give an account of your stewardship.'"

8 ) Calvin, like Martin Luther, put a great deal of emphasis on the idea of a "calling" from God. We should constantly remember that "in everything the call of the Lord is the foundation and beginning of right action....In all our cares, toils, annoyances and other burdens, it will be no small alleviation to know that all of these are under the superintendence of God."

Friday, November 5, 2010

Check This Out

We link to Mark D. Robert's blog over at the right. If you have some extra time, check out his recent series on Jesus as Savior, Wisdom of God, and Son of Man. Mark Roberts always seems to have knack to write about Christianity in a straightforward, easy to understand style.

Death to Conservativism?

The front page of the New York Times on Wednesday read, "Obama Received Rebuke". On the various election websites the United States was painted red with small islands of blue in all races. Yet, there are real frictions within the Republican Party. This this linked article from Politico reveals the friction. Rather than riding a wave of success the article suggests many Republicans are stewing over the victories that could have been.

The argument is that conservatives lost races in Delaware, Colorado, Nevada, and (are currently losing) Washington because the candidates were not centrist enough. Strategists say that the Republicans should not put forth candidates so conservative in the future. They will have no chance at the White House unless they become less conservative. My question is, "What does this imply?"

If, in fact, the sentiment is that these candidates were too conservative and unable to win that must mean one of two things. First, the Republican party believes that the whole nation has become more leftist. That is, a candidate with more traditional conservative values would not be able to garner enough votes to be viable. Second, the strategists do not accurately understand people's beliefs.

The burning question is whether traditional conservative values such as small government and lower taxes dead?  

Thursday, November 4, 2010

Low Income Workers: How Dependent are We?

Earlier today my wife sent me a link to an article on the BBC News website titled, "Do the Poor Have a Right to Live in Expensive Areas?".  The British Parliament will soon vote on a bill to limit housing support money transferred to low income Britons to £21,000.The title of the article struck me as an absurd question because it represents actions far beyond securing basic living standards; but, uses taxpayer dollars to fulfill a desire to live in a nicer location. However, some of the questions raised within the article are worth some consideration because they are common mistakes made by non-economists. I will address the first question today and the second one later on.
1. How much do we depend upon lower income workers? How much do we value low income workers?

Below is quote from Lynsey Hanley regarding the value of low income workers.
"We need these people to do many of the minimum-wage jobs on which we depend - cleaning, catering, retail and so on," she says. "If you take away housing benefit and shift them out, this country's high transport costs mean they'll have no incentive to come into our cities to work.What I'd say to David Cameron is: come back to me when the minimum wage is £12 an hour." -Lynsey Hanley
What Ms. Hanley is saying is that a lack of housing benefits will cause these low income workers, some of whom I depend upon, to leave and not come back to the community.  This is completely possible. If the costs of transportation push their spending beyond the total wages received these workers will not maintain their current job but may find work closer to home.However, the notion that minimum wage would need to increase in order to entice people to work in these low wage jobs is suspect because it acts as though there is no labor market. I've included two diagrams below to illustrate this point.

Labor Demand: All employers seeking to hire workers

Labor Supply: All workers seeking to supply their labor

Story #1: The first diagram drawn in black shows that employers really depend on low wage workers. Note that the employer's quantity demanded does not change very much as price increases or decreases.  This means that the employer needs these workers for the success of their operation.  The labor supply curve shifts to the left because the increased transportation costs increase their cost to providing labor.This is the story Ms. Hanley sets forth, and if it's true then the market will respond with a high wage because businesses must have these employees to maintain a viable operation.

Story #2: The second diagram written in red sets forth employer's that do not think these low wage workers are critical to their operation. That is, if the price needed to entice their workers increased (because the cost of transportation increased) they would replace them with technology or ask current workers to multitask.

Notice that the wage increases much more when the demand curve is steeper, that is the case where the low income worker is vital to the operation of business. Both of these diagrams assume that the costs for all the low income workers will increase. In fact, this is not likely the case. Many of the low income jobs would be filled by middle income teenagers living in London that do not face increased costs to supply their labor.

Also, there are many times where it seems that people intimate that because people are paid a low wage, their dignity is lessened. If I were paid a low wage would I think that my life was less meaningful? If I didn't have access to a nice apartment would I begin to think that God and my family loved me less? This was not in the statement posed by Ms. Hanley but I think deep down that it is the thought process that occurs in many people's minds.

The second question (that I will tackle on Monday) is this, "What happens to the displaced people in a gentrified area? Also, normatively, is it really important for the rich and poor to be intermixed in the same neighborhood like this article suggests?"

Seeing God

I chanced upon this article this morning. (In case the link doesn't work, try finding it as "What Does God Really Look Like" by Marcia Morrissey). I don't know why but it really caught my attention. It's neither long nor scholarly. It's not tied to a season or festival. It's not trying to pound a point home. (I often read posts by her husband Ed). I hope you have the time to click on it and read it.