The Catholic University of America

Viewing by month: June 2011

Jun 28 2011

Time to Stop the (Economic Policy) Madness

Here’s the state of the U.S. economy.  It is operating well below its capacity—current real GDP is about five percent below potential real GDP, i.e, the value of GDP at full employment.  The official unemployment rate stands at 9.1 percent.  Add discouraged workers and this rises to 10.3%.  Add those who are working part-time but want to work full-time and it rises to 15.8%.  Forty five percent of the unemployed have been unemployed for 27 weeks or more.  Initial unemployment claims last week were again over 400,000.  And this doesn’t include the over 25 million workers who are staying put in jobs from which they would have moved in more normal times. 

The economic recovery is stumbling badly and there’s not a lot to be optimistic about.  The state and local government sector is hemorrhaging jobs and will continue to do so—IHS Global Insight has forecasted that the sector will lose an additional 110,000 jobs in the third quarter.  And what are House and Senate Republicans worried about—the deficit.  And what are they urging—slashes in federal spending along with tax cuts, of course.  This is just lunacy.  This is not the time to slash federal spending, it is not the time for contractionary fiscal policy.  It is time for, oh dare I say it, MORE fiscal stimulus not less.  The long-term economic consequences of doing nothing to address the unemployment problems we have now will be far more damaging to the future of the economy than the increases in the near term deficits and in the national debt precipitated by more stimulus.

But, the first stimulus didn’t work, people will say, so why a second round?  Because as I (and many others) said at the time, the first stimulus was too small, it was offset considerably by decreases in state and local government spending, and relied too heavily on Republican-favored tax cuts with minimal spending impact.   (The hoot, of course, was that even though the tax cuts were included to pacify Republicans, not one Republican voted for it.)


0 comments - Posted by Ernest Zampelli at 9:45 AM - Categories: Economy

Jun 2 2011

What is Subsidiarity?

Subsidiarity refers to the appropriate balancing of responsibilities and functions among the parts of a social order.  It has its origin in the Catholic understanding of community, which perceives a community not as a so many individuals connected by contracts, but as a corporate whole—a moral and cultural body that, like any body, is comprised of limbs and parts the differences of which contribute to the good of the whole.  The ethic that pertains to the unity of the body is called solidarity.  The ethic that pertains to the role of the parts is subsidiarity.  And the good of the whole by which solidarity and subsidiarity are measured is called the common good.

In the complete sense, this understanding is referred to as the Mystical Body of Christ.  Romans 12:4-5 puts it this way.  “For as in one body we have many parts, and all the parts do not have the same function, so we, though many, are one body in Christ and individually parts of one another.”  But, Catholic teachings encourage us to promote such an understanding in all human associations.  Hence, the Church argues that subsidiarity (like solidarity and common good) is an ethic to apply even to political governance.

The root of the word subsidiarity is the Latin subsiduum, which is also the same root for our English word subsidy.  Subsiduum was used, among other things, in reference to the morally weighted giving from those who had to those who had not, much like we still understand the old French term noblesse oblige.   Its context is a traditional understanding of society, arranged hierarchically, wherein the various classes each had obligations to the other.
So, from its original root, subsidiarity invokes that hallmark idea of traditional Catholic teaching: the preferential option for the poor.  Moreover, it shares with its root a context in the social order as a body-like whole, in which everyone has moral obligations vis-à-vis others in light of the common good.  From subsiduum also comes the Latin subsidiarius, which refers to a person to whom a subsidy should be given.  In Roman-based systems of law, courts’ concern with compensation to a subsidiarius was to avoid either overcompensating or under compensating.    Overcompensating, it was reasoned, undermined the ability of those in our care to take responsibility for their own duties to the community and society.  It sapped initiative.  Under compensating, just the reverse, would not provide enough subsidy to those depending on us for them to fulfill their potential for themselves and the social order.


6 comments - Posted by Stephen Schneck at 1:30 PM - Categories: Government & Civil Society