Benedict’s Progressive Legacy (UPDATE)

In addition to the analysis of John Gehring featured below, I have updated this post with the insights of Michael Sean Winters, who says the following about Benedict's social vision:

On the economy, Benedict staked out positions that were far more radical than what passes for progressive politics in the U.S. For example, in his encyclical Caritas in Veritate, the pope defended the rights of workers in the most explicit terms: "Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task of representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labor unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Church's social doctrine, beginning with Rerum Novarum, for the promotion of workers' associations that can defend their rights must therefore be honored today even more than in the past, as a prompt and far-sighted response to the urgent need for new forms of cooperation at the international level, as well as the local level." This warm embrace of organized labor is not on the agenda of today's Republican Party to be sure.

Benedict also challenged modern capitalism for the gross inequalities it produces both within and among nations. In his recent World Day of Peace message, he listed five threats to world peace, and he started with "unregulated financial capitalism." The others: terrorism, international crime, fanaticism and fundamentalism. You do not need to conduct a poll to imagine how many Republicans would respond if President Barack Obama lumped together "unregulated financial capitalism" with terrorism and international crime.

The effects of capitalism were not the only problems he discerned. In Caritas in Veritate he noted the ways capitalism fails at its core and in its ethical demands. The market requires competition, not solidarity. It lionizes self-assertion, not self-surrender, and it values thrift and frugality, not gratuitousness and generosity. The market's heroes are self-made men. But, as Benedict taught, Christians are called to follow Jesus, whose entire life was an act of solidarity, who never asserted himself but always self-surrendered to the will of the Father, whose grace is never thrifty or frugal but gratuitous, always a bit surprising, never stingy. Most obviously, Jesus was not a "self-made man." Benedict, like previous popes, did not propose a specific economic system, but his critique of modern capitalism, root and branch, was stinging. Why did this never garner much in the way of headlines?


John Gehring, Program Director at Faith in Public Life, has an interesting article up at Catholics in Alliance for the Commong Good. He examines elements of Pope Benedict’s work that leaned in a more progressive direction, particularly economic policy and environmental stewardship:

John Gehring

In his 2009 encyclical, Caritas in Veritate, Pope Benedict denounced the “scandal of glaring inequalities” and called for a more just distribution of global wealth. A defining theme of Benedict’s papacy – especially after the 2008 global financial crisis – was an uncompromising critique of economic systems that subjugate the human person to the demands of profit. In his World Day of Peace message just last month, he lamented “the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated financial capitalism.” Along with “terrorism” and “international crime,” the pope named unfettered markets as a threat to stability and peace. It’s an understatement to say you won’t hear that kind of talk from most U.S. politicians who rely on Wall Street largesse to finance campaigns. While free-market fundamentalists lobby for greater deregulation of markets and corporations, the Vatican’s justice and peace council during the Benedict era called for a “minimum, shared body of rules to manage the global financial market” and a “world reserve fund” to support countries hard hit by the economic crisis.

Benedict has also been called the “Green Pope” for defining environmental stewardship in stark moral terms and his frequent warnings about climate change. More than any of his predecessors, this pope has articulated a clear theology behind what he calls the “covenant between human beings and the environment.”  In 2011, the day before world leaders from 194 countries met in Durban, South Africa to chart the next steps to address climate change by reducing greenhouse gases, the pope used his weekly noon blessing to urge the international community to “agree on a responsible, credible and supportive response to this worrisome and complex phenomenon, keeping in mind the needs of the poorest populations and of future generations.” He told a Franciscan environmental group attending the Durban conference that “there is no good future for humanity or for the earth unless we educate everyone toward a style of life that is more responsible toward the created world,” according to Catholic News Service. Under Benedict’s tenure, several Vatican buildings were outfitted with solar panels and the Vatican has pledged to install enough renewable energy sources to provide 20 percent of its needs by 2020, a measure in line with a European Union proposal.

Why are the Vatican and Elizabeth Warren Blaming the Banks? Ask Gramm and Schumer

Just a couple weeks ago I posted this quote from Elizabeth Warren on my facebook page: "The people on Wall Street broke this country, and they did it one lousy mortgage at a time. It happened more than three years ago, and there has been no real accountability, and there has been no real effort to fix it.” I was challenged by a friend who claimed that the banking system should not be singled out for the economic collapse. I explained that I agreed there were multiple causes, but that part of the reason I appreciate Warren’s language is that the bank’s role in this has been downplayed, and in fact the bank’s have managed to right their ship with massive taxpayer funding and are now back making enormous profit. In light of all that, I support Warren’s focus on the banks.

I thought of that exchange when I read this portion of the Vatican’s new statement on the global financial crisis that I blogged about last night:

In recent decades, it was the banks that extended credit, which generated money, which in turn sought a further expansion of credit. In this way, the economic system was driven towards an inflationary spiral that inevitably encountered a limit in the risk that credit institutions could accept. They faced the ultimate danger of bankruptcy, with negative consequences for the entire economic and financial system…A liberalist approach, unsympathetic towards public intervention in the markets, chose to allow an important international financial institution to fall into bankruptcy, on the assumption that this would contain the crisis and its effects. Unfortunately, this spawned a widespread lack of confidence and a sudden change in attitudes. Various public interventions of enormous scope (more than 20% of gross national product) were urgently requested in order to stem the negative effects that could have overwhelmed the entire international financial system.

The consequences for the real economy, what with grave difficulties in some sectors – first of all, construction – and wide distribution of unfavourable forecasts, have generated a negative trend in production and international trade with very serious repercussions for employment as well as other effects that have probably not yet had their full impact. The costs are extremely onerous for millions in the developed countries, but also and above all for billions in the developing ones.

The Vatican’s analysis, rooted in over a century of Catholic Social Teaching, was released by the Pontifical Council for Justice and Peace at a press conference given by the Council’s President, Cardinal Peter Turkson, and its Secretary Bishop Mario Toso.

Before people dismiss Warren and Cardinal Turkson as simplistic, consider the way in which two of America’s leading politicians over the last 20 years, one a Republican and one a Democrat, have operated with regards to banks and the broader financial sector.

First the Republican, former Senator Phil Gramm of Texas:

Back in 1950 in Columbus, Ga., a young nurse working double shifts to support her three children and disabled husband managed to buy a modest bungalow on a street called Dogwood Avenue.

Phil Gramm, the former United States senator, often told that story of how his mother acquired his childhood home. Considered something of a risk, she took out a mortgage with relatively high interest rates that he likened to today’s subprime loans.

A fierce opponent of government intervention in the marketplace, Mr. Gramm, a Republican from Texas, recalled the episode during a 2001 Senate debate over a measure to curb predatory lending. What some view as exploitive, he argued, others see as a gift.

“Some people look at subprime lending and see evil. I look at subprime lending and I see the American dream in action,” he said. “My mother lived it as a result of a finance company making a mortgage loan that a bank would not make.”

On Capitol Hill, Mr. Gramm became the most effective proponent of deregulation in a generation, by dint of his expertise (a Ph.D in economics), free-market ideology, perch on the Senate banking committee and force of personality (a writer in Texas once called him “a snapping turtle”). And in one remarkable stretch from 1999 to 2001, he pushed laws and promoted policies that he says unshackled businesses from needless restraints but his critics charge significantly contributed to the financial crisis that has rattled the nation.

Second, Senator Charles Schumer, New York:

As New York’s senior senator, Schumer has represented lower Manhattan, the Mount Olympus of the nation’s finance sector, since 1999, and has had a say in every major piece of legislation affecting the industry over the past decade, say Senate sources.

Contributions from securities and investment firms to the DSCC nearly tripled during Schumer’s tenure as chairman.

Securities and investment firms gave $5.7 million to the DSCC when it was headed by former Sen. Jon Corzine (D-N.J.) in the 2004 election cycle.

These firms gave nearly $15 million last cycle under Schumer’s watch. In 2007 and 2008, Goldman Sachs, JPMorgan Chase, Fortress Investment Group and Citigroup ranked among the DSCC’s top 20 donors, according to the Center for Responsive Politics.

Three of those firms, Goldman, JPMorgan and Citigroup, have accepted TARP funds. (From The Hill.)

Over the course of his career, Schumer has raised half a million dollars from Goldman Sachs – and nearly as much from Citigroup, Morgan Stanley and JPMorgan Chase. Between 1989 and 2010, according to the nonpartisan Center for Responsive Politics, Schumer took in nearly $9 million from the entire securities and investment industry, a haul that helped him become one of the most powerful politicians in America, a deep-pocketed kingmaker with unrivalled connections among the wealthiest players on Wall Street.

The seeming contradiction between Schumer’s public posture and his closed-door fundraising efforts had gone little-noticed by the general public before the financial crisis. But when the securities and investment industry was thrust into chaos – and the spotlight – in 2008, Schumer’s Wall Street ties suddenly became a political liability.

After all, Schumer’s biggest donors were the very folks who President Obama would later, in response to public anger, deem “fat cat bankers.” In the years leading up to the crisis, Schumer had been pushed hard to deregulate the financial industry; as the New York Times documented in the wake of the crisis, he had repeatedly protected the industry from oversight and helped companies avoid billions of dollars in taxes and fees. Schumer didn’t turn his back on his allies. He was one of the major drivers behind passage of the $700 billion bank bailout approved by Congress in the midst of the crisis. The bailout, which spawned the conservative Tea Party movement and was hugely unpopular with the left, was a literal lifesaver for the financial services industry. (CBS News story)

The powerful interests that Warren and the Vatican rail against are reflected in the senatorial careers of Gramm and Schumer. The picture of the Senate under a cozy bipartisan agreement to favor the financial sector is confirmed by one of the few Senators honest enough to confront it, Jim Webb the Virginia Democrat.

Webb has pushed for a onetime windfall profits tax on Wall Street's record bonuses..."I couldn't even get a vote," Webb says. "And it wasn't because of the Republicans. I mean they obviously weren't going to vote for it. But I got so much froth from Democrats saying that any vote like that was going to screw up fundraising. People look up say, what's the difference between these two parties? Neither of them is really going to take on Wall Street. If they don't have the guts to take them on, and they've got all these other programs that exclude me, well to hell with them. I'm going to vote for the other people who can at least satisfy me on other issues, like abortion. Screw you guys. I understand that mindset." (Real Clear Politics)

The Vatican's Radical Economic Proposal

The Vatican’s major statement on the global economy is creating great discussion and disagreement. Here is some of what I am reading about it.

In a piece aptly titled "Holy See vs. Laissez Faire", Michael Sean Winters says:

there is no denying that the document’s economic vision is somewhere to the left of the most vigorously leftie politicians in this country. Can you imagine the cries of tyranny that would emanate from the Tea Party crowd if it were President Obama, rather than Pope Benedict XVI, who was calling for an international organization with oversight powers over the financial sector?...Kudos to Cardinal Turkson and the Holy Father for calling the world’s attention to the barbarism in our midst and pointing us towards a different set of values than those that govern Wall Street and insisting on the proposition that human reason can through instruments of public governance be brought to bear on the economy.

The best summary I read of the Vatican document is in the International Business Times:

The report points to the world's financial markets and big banks as major causes of the "grave economic and financial crisis which the world is going through today." While the Vatican said the current state of affairs has been brought on by multiple factors over the years -- such as the structural weaknesses of political, economic and financial institutions and questionable ethics in a system that encourages utilitarianism and materialism -- it emphasized the role of banks, which the Church said endlessly extended credit until the economic system was driven "towards an inflationary spiral."

John Allen, a leading analyst in the English language on the Vatican, does a great job of placing the teaching within the language and perspective of the global south.

It's fitting that the Vatican official responsible for the document is an African, Cardinal Peter Turkson of Ghana, because it articulates key elements of what almost might be called a "southern consensus." One way of sizing up the note's significance, therefore, is as an indication that the demographic transition long under way in Catholicism, with the center of gravity shifting from north to south, is being felt in Rome… to be specific, Southern bishops, priests, religious and laity often are:

•                Skeptical of free-market capitalism and unregulated globalization;

•                Wary about the global influence of the United States;

•                Pro-United Nations and pro-global governance;

•                In favor of a robust role for the state in the economy…

This is not the dying echo of warmed-over European socialism. For better or worse, it's the first ripple of a southern wave.

One of the most aggressive voices in the United States in favor of the Vatican’s document is the group Faith in Public Life.

An important document on financial reform released today by the Vatican's justice and peace office is a timely challenge to conservative political leaders eager to carve up the Dodd-Frank Wall Street reform law passed last year. For that matter, the 41-page document - "Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority" - is far to the left of almost any politician in the United States (short of Sen. Bernie Sanders) and should also give pause to Democrats whose fundraising coffers spill over with contributions from a financial sector that has been allowed to run amok over the past three decades.

If deregulation and free-market fundamentalism have largely defined the American posture, the Vatican is challenging world financial and political leaders to rethink structural systems and the moral foundation of neoliberal economics. Showing that Vatican officials think in centuries but also read the morning headlines, it addresses "the speculative bubble in real estate," and calls for a "minimum, shared body of rules to manage the global financial market" - pointing to "rapid, uneven growth" that has arisen because of the "overall abrogation of controls on capital movements and the tendency to deregulate banking and financial activities."

A take down of the neoconservative George Weigel’s dismissive attitude towards the document and his attempt to blame the media for radicalizing the Vatican’s statement comes from Charles Lewis in the National Post in Canada.

So this document, or “note,” speaks for no one but a Pontifical Council issues it for the fun of it? How does that work?

And how in the world would anyone know that this document does not reflect a point of view of the Vatican of at least some people in the Vatican? How does Mr. Weigel know? It is not as if the note came with a warning that said: “Ignore The Contents of This Note. We’re From the Vatican But Not Really.”

Rather than question how the media reported on this, Mr. Weigel would do better to ask why any Vatican office, large or small, would issue such a document knowing full well the confusion it would cause.

For those who have not read it, here are a few excerpts:

•               “This process must also involve the emerging and developing countries in defining the stages of a gradual adaptation of the existing instruments. In fact, one can see an emerging requirement for a body that will carry out the functions of a kind of ‘central world bank’ that regulates the flow and system of monetary exchanges similar to the national central banks.”

•               “It is the task of today’s generation to recognize and consciously to accept these new world dynamics for the achievement of a universal common good. Of course, this transformation will be made at the cost of a gradual, balanced transfer of a part of each nation’s powers to a world Authority and to regional Authorities, but this is necessary at a time when the dynamism of human society and the economy and the progress of technology are transcending borders, which are in fact already very eroded in a globalized world.”

Then, remarkably, it makes the specific suggestions of taxing financial transactions and using public funds to recapitalize banks and making support “conditional on virtuous behaviours aimed at developing the real economy.”

New York Times and Washington Post both highlight the disagreement with the document by the Acton Institute. The Times:

Writing in the National Review, Samuel Gregg of the Acton Institute, which promotes free-market economic policies, said of the document: “It reflects rather conventional contemporary economic thinking. Unfortunately, given the uselessness of much present-day economics, that’s not likely to make it especially helpful.”

The Washington Post:

“What makes the (Council) think that ‘global’ leaders will succeed where so many national ones have failed” asked Kishore Jayabalan, director of the Acton Institute’s Rome office, and a former staff member at the Council. “It is a shame this document is based more on sentimental political hopes for world government than on actual experience and expertise of financial markets.”

Obama Awakening?

I have been discouraged about President Obama in recent months and I recognize that one speech does not make for a changed presidency, but this morning’s speech was a continuation of a new tone and vision that has marked recent proposals and speeches. It gives hope to progressives that the President might yet have a chance to not only restore his political prospects but to more importantly take aim at the true causes of our economic plight. The only hope for victory and a victory worth having is to see the President spend the next 15 months with the kind of spirited determination to take the argument to the extreme economic agenda of today’s Republican party that marked today’s speech. 15 months of this cannot erase the tragic economic decisions that Obama and his team have made during this first term, but it does clarify what is at stake in the coming election. Here were key lines that I hope he will be consistent in stating and explaining and defending in the week's to come:

“This is not class warfare, this is math”

“I reject the idea that asking a hedge-fund manager to pay the same tax rate as a plumber or teacher is class warfare. I think it’s just the right thing to do.”

“Warren Buffett’s secretary should not pay a higher tax rate than Warren Buffett”

“I will not support any plan that puts all the burden…on ordinary Americans”

“Anyone who assigns some pledge to protect every single tax loophole so long as they live, they should be called out, they should have to defend that unfairness, explain why somebody who is making $50,000,000 a year in the financial market should be paying 15% on their taxes when a teacher making $50,000 a year is paying a higher rate.”

“We are not going to have a one-sided deal that hurts the folks most vulnerable”

“Towards the payments of debts there must be revenue, that to have revenue there must be taxes and no taxes can be devised which are not more or less inconvenient and unpleasant” Quoting George Washington

“Our responsibility to put country before party”

This is “about fairness, about whether we are in fact in this together and we are looking out for one another”

Sarah "TR" Palin? A welcome shift in her rhetoric

The New York Times has a fascinating piece detailing a significant new addition to the Palin stump speech and opening a window onto someting significant. According to the report, Palin had a very new line of reasoning in a speech this week, much different than what other Republicans are saying in the primary, and more Progressive in its bent. She is evoking the Reformer, anti-corporate side of the Teddy Roosevelt wing of the party and she is saying things that would be surely be said if there were an opponent of Obama in a Democratic primary. This is more in keeping with the Sarah Palin that had originally interested Ross Douthat back when she was governor of Alaska and is the Palin that Joshua Green has been writing about for months at The Atlantic. Of course, what is still missing from her critique is an explicit linking of the military industrial complex to the broader point about "unaccountable institutions"--that is what you would be hearing more of it were Bernie Sanders instead of Palin making the argument, but this is nonetheless significant. Here is the key part of the Times' article:

Ms. Palin’s third point was more striking still: in contrast to the sweeping paeans to capitalism and the free market delivered by the Republican presidential candidates whose ranks she has yet to join, she sought to make a distinction between good capitalists and bad ones. The good ones, in her telling, are those small businesses that take risks and sink and swim in the churning market; the bad ones are well-connected megacorporations that live off bailouts, dodge taxes and profit terrifically while creating no jobs.

Strangely, she was saying things that liberals might like, if not for Ms. Palin’s having said them.

“This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk,” she said of the crony variety. She added: “It’s the collusion of big government and big business and big finance to the detriment of all the rest — to the little guys. It’s a slap in the face to our small business owners — the true entrepreneurs, the job creators accounting for 70 percent of the jobs in America.”

Andrew Sullivan's take on this new Palin is here.

Economics, Libya and Religion and International Diplomacy

 I am taking a break this morning from reading about the New Apostolic Reformation and the Religious Right debates. Here are a few things I have read that will be of interest to many.

Commonweal has the best article I have yet seen on the entire deficit debate and its implications for the common good. It reflects the frustration of many that President Obama has allowed the debate to run towards an effect—high deficits, rather than the cause—economic recession, while at the same time laying bare the folly of Boehner’s analysis of the economy. This is particularly important reading for those Christians on both sides of the debate. A serious piece for serious questions.

The biggest economic problems the United States now faces are unemployment, income inequality, and the fact that much of the financial sector still operates like a casino. If the country could solve these problems, the gap between government outlays and government spending would immediately shrink, if not disappear. By instead focusing attention on the country’s debt, politicians are getting it backwards. Contrary to the claim of many leading Republicans on Capitol Hill, there is no reason to think that immediate cuts to government spending will help the economy—or that spending cuts can’t wait until the economy improves. Behind the confusion on these points are four myths about national debt that have somehow become conventional wisdom in Washington and in most of the media.

 The International Center on Religion and Diplomacy is a great group with a great mission—“to address identity-based conflicts that exceed the reach of traditional diplomacy by incorporating religion as part of the solution.” Their director, an evangelical Protestant named Douglas Johnston, has recently published a book that is garnering significant attention: Religion, Terror, and Error: U.S. Foreign Policy and the Challenge of Spiritual Engagement.

"I consider this to be the best book that has yet been published on how religion can be deployed to improve U.S.-Muslim World relations.” Imam Feisal Abdul Rauf

“From my two decades of experience in the Islamic world, I am convinced that the vast majority of Muslims would embrace this approach as a means of clearly expressing their beliefs and enabling them to understand ours.” General Anthony Zinni

The New York Times has a lead story on the interesting journey of one of the Libyan rebel commanders—from former CIA prisoner and torture victim, to NATO and U.S. ally.

“As the United States and other Western powers embrace and help finance the new government taking shape in Libya, they could face a particularly awkward relationship with Islamists like Mr. Belhaj. Once considered enemies in the war on terror, they suddenly have been thrust into positions of authority — with American and NATO blessing.”