Pope condemns Capitalism

[Sir Bandelot]

Pope blasts capitalism ahead of G-8 meeting

Pope Benedict XVI, on the eve of a global economic summit, lashed out at modern capitalism for being shortsighted and short on ethics.

"Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise," the pontiff said in his third encyclical letter, "Charity in Truth," which was released Tuesday.

"Above all, the intention to do good must not be considered incompatible with the effective capacity to produce goods," Benedict said. "Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers."

The world financial crisis and the downturn in markets took a big chunk out of the retirement savings of millions of people.

What a novel idea, ethical banking and investing.

Hey Mr. Pope man, can I get a loan from the Vatican Bank...

[M.Dancer]

What a novel idea, ethical banking and investing.

Hey Mr. Pope man, can I get a loan from the Vatican Bank...

I don't see his diatribe as a condemnation of capitalism but a call to curb the free wheeling culture seen in some markets. The hard part is people think of new ways to make money faster than regulators can ensure that those ways are fair to the investor .

[ToadBrother]

I don't see his diatribe as a condemnation of capitalism but a call to curb the free wheeling culture seen in some markets. The hard part is people think of new ways to make money faster than regulators can ensure that those ways are fair to the investor .

Maybe he should start with the Vatican's bankers. Apparently the Holy See lost it's fair share with the collapse of the markets.

Whoda thunk it, the Pope, a disgruntled investor.

[noahbody]

I think he heard that French bankers use French safes.

[Pliny]

Pope blasts capitalism ahead of G-8 meeting

"Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers."

The world financial crisis and the downturn in markets took a big chunk out of the retirement savings of millions of people.[/i]

These statements are true. In the first statement he isn't condemning Capitalism. He is saying it needs to do some rediscovering of its roots and to returning to the "genuinely ethical foundation of their activity". I agree whleheartedly there is a genuinely ethical foundation to capitalism. Not State Capitalism or monetarism but laissez-faire, free market capitalism.

Unfortunately as long as governments can manufacture money or borrow what they can convince everyone they need then we are headed for economic collapse. Government has created moral hazard for the Financiers and the Financiers follow the policies of government - if they can predict that then they can create some bubbles and make some "money". Government makes it difficult to make an honest dollar and harder to keep it. Inflation and taxation eat 50% of it in Canada and about 45% in the US.

[kuzadd]

Unfortunately as long as governments can manufacture money or borrow what they can convince everyone they need then we are headed for economic collapse. Government has created moral hazard for the Financiers and the Financiers follow the policies of government - if they can predict that then they can create some bubbles and make some "money". Government makes it difficult to make an honest dollar and harder to keep it. Inflation and taxation eat 50% of it in Canada and about 45% in the US.

Governments can manufacture money?????

They don't ya know.

Cause if they did, why would they pay interest to themselves?

Government has created moral hazard for financiers and the financiers follow the policies of government???

UM, nope not true either.

In case you have missed the latest, it has been the financial banksters that have been running the government in the US. They asked (lobbied, greased the palms of) the government for and got all the changes they wanted. Hell the big bonuses are back that were paid for by the people

You have everything ass backwards and that is exactly why things are a mess.

Have you not read up on Goldman-SAchs market machinations as of late??

Tax increases are because of the banks, to pay back loans to the banks???

Because the government borrows money with interests.

It would be better and cheaper for the population if the government in fact did lend itself money, interest free.

You really don't know a dam thing about the banking system or how money actually comes to fruition do you????

[kuzadd]

Pope blasts capitalism ahead of G-8 meeting

Pope Benedict XVI, on the eve of a global economic summit, lashed out at modern capitalism for being shortsighted and short on ethics.

"Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise," the pontiff said in his third encyclical letter, "Charity in Truth," which was released Tuesday.

"Above all, the intention to do good must not be considered incompatible with the effective capacity to produce goods," Benedict said. "Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers."

The world financial crisis and the downturn in markets took a big chunk out of the retirement savings of millions of people.

What a novel idea, ethical banking and investing.

Hey Mr. Pope man, can I get a loan from the Vatican Bank...

ethical banking and investing would be a good thing, getting rid of derivative speculation would likely be a really good thing.

But coming from the Pope?

And all the scandals surrounding the Vatican Bank and the bank ambrosia scandal that was connected to that??

come on!

I saw a number of articles, regarding sharia banking, which is very ethical, no usuary involved and since they do not involve themselves in wild speculation the banks have weathered the economic crisis very well.

Oops, no usuary involved, oh yeah, that must be but one of the reasons to attack countries that don't use the rip off central bank systems.

I posted an article previously about how well these banks were faring and why, I will see if I can find it again.

here it is

the article is entitled Is Islamic Finance the answer

I don't know if it is or it isn't but the system we use, with lots of usary, isn't working good for us, as it requires lots of help, allows for way to much manipulation, thinking of the creation of bubbles to create the illusion of wealth and leads to collapse to often leaving many people in ruins, not including the upper crust or the 1% who actually hold most of the wealth, while the rest of us clamour for crumbs.

sorry for rambling bandelot

Edited July 10, 2009 by kuzadd

[benny]

The world financial crisis and the downturn in markets took a big chunk out of the retirement savings of millions of people.

What a novel idea, ethical banking and investing.

Hey Mr. Pope man, can I get a loan from the Vatican Bank...

How this loan would not betray the interests of savers is the question the Pope asked.

Edited July 10, 2009 by benny

[kuzadd]

btw bandelot have you seen the bill black/bill moyers interview???

seriously worth the time to watch

[benny]

btw bandelot have you seen the bill black/bill moyers interview???

In essence, William Black said corruption is caused by a deliberate slashing of banking regulations.

[kuzadd]

In essence, William Black said corruption is caused by a deliberate slashing of banking regulations.

at the behest of the banksters

amongst other things he said.

[benny]

at the behest of the banksters

amongst other things he said.

He spoke also about leverage.

[Sir Bandelot]

btw bandelot have you seen the bill black/bill moyers interview???

seriously worth the time to watch

Yes it is, thank you, and I do not mind your ramblings!

[benny]

Here the pontiff's encyclical letter, "Charity in Truth," released Tuesday:

http://www.vatican.va/holy_father/benedict...eritate_en.html

[Pliny]

Governments can manufacture money?????

They don't ya know.

Cause if they did, why would they pay interest to themselves?

The taxpayer pays the interest.

Government has created moral hazard for financiers and the financiers follow the policies of government???

UM, nope not true either.

In case you have missed the latest, it has been the financial banksters that have been running the government in the US. They asked (lobbied, greased the palms of) the government for and got all the changes they wanted. Hell the big bonuses are back that were paid for by the people

You have everything ass backwards and that is exactly why things are a mess.

Have you not read up on Goldman-SAchs market machinations as of late??

Tax increases are because of the banks, to pay back loans to the banks???

Because the government borrows money with interests.

It would be better and cheaper for the population if the government in fact did lend itself money, interest free.

You really don't know a dam thing about the banking system or how money actually comes to fruition do you????

Here's a few pointers so you have a little understanding of what is going on around you.

Moral hazard

This is created when someone insures against risk. An example would be deposit insurance.

The government insures the citizens bank deposit. Does the citizen care if the bank is solvent?

The government insures the deposit why should he care. Does the citizen know anything about the financial strength of his banking institution. He doesn't have to even think about it. If there were not that insurance he might look a little more closely at the balance sheets of his bank.

Now in the current sub-prime crisis where is the moral hazard created?

I listened to the Bill Black interview and he said a very important thing. He said that the S & L crisis occurred but only about 10 % of Managers participated in the scheme. Personal Ethics and Morality kept 90% of the financial players from participating - not regulation. He himself misses the point that it is not regulation that keeps people honest it is their own sense of ethics and integrity.

The sub-prime crisis, Mr. Black says, is the result of de-regulation, and what part did personal ethics and integrity play - none? What happened to people's personal ethics and integrity which he said accounted for 90% of people in the S & L debacle from participating in the scheme? Were they now all bereft of ethics and integrity. How come so many abandonded principles of trust?

It was all guaranteed is perhaps a good reason.

Now Mr. Black says the Treasury secretary, Tim Geithnor is trying to cover up the causes of the failure. I wholeheartedly agree. The Obama administration is covering up what happened.

It is saying it was a lack of regulation because of policies of the Bush administration. Why does Mr. Black agree with this? Why would he believe Geithnor who is covering it up?

What happened to create moral hazard was government bought a majority of the repackaged Ninja derivitives thorugh Fanny Mae and Freddie Mac. I think AIG probably acted as a cleraing house for these loans. They basically guaranteed the loans. Not only that but they had community organizations picketing banks and the homes of bank managers who refused to make Ninja loans.

The government encouraged this activity by doing nothing.

Basically there is too much regulation. It is too fuzzy. No one understands them all. Did yousee that big stack regulatory papers covered witht red tape those guys were cutting. How can the government enforce regulations it doesn't even understand? Regulations that are so complex and numerous no one has a clue what's going on. And no one did. There is still too much regulation.

The failure is that government cannot deliver justice because it can't see what it is. It had the responsibility to prosecute this fraud and nip it in the bud but didn't. It let it progress until it became too big and involved too many people to do anything about and had to leave it to run it's course. The collapse was inevitable. Mr. Black isn't wrong when he says bankers and government colluded to hide the problem.

Speculators took advantage of the governments "push" to approve Ninja loans and then sold the loans to the government and insurance groups like AIG. Speculators were probably wondering why they weren't getting arrested but the snowball started. The housing boom was great for unemployment, new homeowners, real estate companies, construction companies, developers, motgage companies. Government encouraged it all to start and then no one wanted to be the party pooper and stop the good times. When it became a runaway train they all closed their eyes.

Now they are picking through the debris.

I understand your view that I must be some kind of economic dunderhead because I don't agree with the mainstream concepts like you do. But take a good look for yourself.

I liked Mr. Black's interview with Bill Moyer. Fraud is being perpetrated by the government and the Federal Reserve is part of it. They are trying to protect the general populace from the ugly truth that they have lost their sense of ethics and integrity and can't tell what justice is because they have so many laws and regulations no one has a clue what's going on.

To think that people, if because they are capitalists, have no sense of ethics or integrity is pretty bad. Mr. Black says that people's own sense of integrity will prevent them from acting fraudulently. I agree. Government has to nip fraud in the bud not encourage it because it might be politically inconvenient to prosecute.

[Sir Bandelot]

"Peoples integrity" surely played no role in the protecting us from the current crisis. People will only have integrity, when there is a price to be paid for doing something illegal, If doing it is not illegal, and there's money to be made, you bet they will do it, despite who else might lose money later on. By removing protections it opens the door to such fraud, where they make bad investments that will harm the company they work for, but don't care as long as they get the profits and bonuses in the short term. Laissez faire is what we've had in the past several years. The removal of regulations happened, its a fact, and it made matters worse. Because of unchecked greed. Theres no ethics, no sense of sharing, no integrity without law.

[benny]

Now Mr. Black says the Treasury secretary, Tim Geithnor is trying to cover up the causes of the failure. I wholeheartedly agree. The Obama administration is covering up what happened.

It is saying it was a lack of regulation because of policies of the Bush administration. Why does Mr. Black agree with this? Why would he believe Geithnor who is covering it up?

Black is putting Henry Paulson and Timothy Geithner in the same basket.

[eyeball]

I thought the Vatican's job was to ensure the people's exposure to the moral hazard of their kings, rulers, head's of state and hangers-on etc would be minimized. Apperently the fear of excommunication and the consequence of eternal damnation is no enough to check the abuse of power and wealth - which like time and space - are essentially one and the same thing right?

I'll be damned if I know what we could possibly use other than the fear of God but in any case methinks its a little late in the day for the Pope to be chastizing capitalism.

[ToadBrother]

ethical banking and investing would be a good thing, getting rid of derivative speculation would likely be a really good thing.

But coming from the Pope?

And all the scandals surrounding the Vatican Bank and the bank ambrosia scandal that was connected to that??

come on!

I saw a number of articles, regarding sharia banking, which is very ethical, no usuary involved and since they do not involve themselves in wild speculation the banks have weathered the economic crisis very well.

Oops, no usuary involved, oh yeah, that must be but one of the reasons to attack countries that don't use the rip off central bank systems.

I posted an article previously about how well these banks were faring and why, I will see if I can find it again.

here it is

the article is entitled Is Islamic Finance the answer

I don't know if it is or it isn't but the system we use, with lots of usary, isn't working good for us, as it requires lots of help, allows for way to much manipulation, thinking of the creation of bubbles to create the illusion of wealth and leads to collapse to often leaving many people in ruins, not including the upper crust or the 1% who actually hold most of the wealth, while the rest of us clamour for crumbs.

sorry for rambling bandelot

At one time Christians were forbidden to charge interest on loans, which is why it was the one area that Jews were permitted to go into. However, by the Renaissance it had become very obvious that the simplistic Medieval banking system was not capable of raising the kind of capital needed by both private interests and governments to undertake major projects like raising armies, civic upgrades, fund trading expeditions and ultimately found mercantile empires. When the Venetians invented modern banking, they created a revolution that is still with us to do, paving the way for actors other than the State and its organs to organize vast projects.

We'll probably be trying to figure what exactly happened last year for the next seventy years, just like there is still disagreement on the precise causes of the Depression (or, more importantly why it became so deep and so prolonged). There are a few hints, and they suggest that governments, and in particular the US government, were major actors in this. Fannie Mae and Freddie Mac were basically created to create a mortgage market for people who would not get a second look from an old-time bank. To a degree, the goal was laudable, but, of course, what ended up happening was a massive housing bubble. Well, once you've got the bubble, of course everyone is going to jump on it. The system is unbalanced and reckless behavior is almost a necessity, or at least there's substantial pressure. Inevitably the bubble bursts, the lending institutions, including those founded by the US government, are left holding a whole pile of worthless mortgages.

So while everyone talks about harsher regulations, more policing of management bonuses and so forth, is anyone suggesting maybe the government should keep its hands out of the markets, acting strictly as a policeman as opposed to an active agent? It seems to me that governments (including the Vatican) have been very quick to blame the bankers and the investment companies for this, but there hasn't been much light shed on the actions of those governments.

But, considering the scandals going in the Vatican's banking and investment system, I honestly don't think the Pope has much right to lecture anyone. Like any national leader, the buck stops with him.

[benny]

I thought the Vatican's job was to ensure the people's exposure to the moral hazard of their kings, rulers, head's of state and hangers-on etc would be minimized. Apperently the fear of excommunication and the consequence of eternal damnation is no enough to check the abuse of power and wealth - which like time and space - are essentially one and the same thing right?

I'll be damned if I know what we could possibly use other than the fear of God but in any case methinks its a little late in the day for the Pope to be chastizing capitalism.

Protestantism is capitalism's spirit:

http://en.wikipedia.org/wiki/The_Protestan...t_of_Capitalism

[Pliny]

"Peoples integrity" surely played no role in the protecting us from the current crisis. People will only have integrity, when there is a price to be paid for doing something illegal, If doing it is not illegal, and there's money to be made, you bet they will do it, despite who else might lose money later on. By removing protections it opens the door to such fraud, where they make bad investments that will harm the company they work for, but don't care as long as they get the profits and bonuses in the short term. Laissez faire is what we've had in the past several years. The removal of regulations happened, its a fact, and it made matters worse. Because of unchecked greed. Theres no ethics, no sense of sharing, no integrity without law.

So, basically people need to be forced to be ethical. They will not be ethical any other way.

I don't think laissez faire has been around for quite awhile. We do have Nafta that was supposed to be some sort of free trade deal between Canada the US and Mexico. Is that what you mean by laissez-faire?

If people had to look for themselves instead of relying on government to look for them then they would, and integrity would play a big role in how companies treated their customers.

I agree that if doing something is not illegal and there's money to be made - they will do it.

The problem is of course that government must be able to see what justice is - if people are taking advantage of a government policy to "enable everyone to own a home" they will do it and that is what occurred, very basically. Certainly integrity and mores were shelved inorder to accomplish this government objective and government, with the blinders of justice off did not object to the accomplishment of it's goals. All was rosy. Just ask most anyone before the crisis hit. All was rosy. The detractors were ignored.

Law is the use of force, not using it, when there are laws against fraud is the same as condoning the action. This is where the government failed in the sub-prime crisis. Not in deregulation.

If the consumer has to look for himself he will smell a rat. He can then call foul. At which point the businessman can self-correct or face corection form the government. If the consumer doesn't have to look at all and depends on Government to do his looking for him then he deserves his destiny. But government has it's own agenda when it is engineering society so don't expect it wil provide justice. It has long ago lost any concept of justice to it's own sense of necessity to itself and the common good. The "common good" overriding justice to the individual. Bailout packages for banks, Wall Street and American Automobile manufacturers all being for the "common good" in it's eyes. You and I know it should have been, "Goodbye" to unethical and immoral fraudsters.

[Pliny]

Protestantism is capitalism's spirit:

http://en.wikipedia.org/wiki/The_Protestan...t_of_Capitalism

Marx is Communists spirit. The cult of Marxism must of course replace the Capitalists spirit. Somehow it has something to do with Protestantism.

[Pliny]

So while everyone talks about harsher regulations, more policing of management bonuses and so forth, is anyone suggesting maybe the government should keep its hands out of the markets, acting strictly as a policeman as opposed to an active agent?

Oui, Je suis. See my many posts. Is anyone important or influential doing so? Increasingly.

Government intervention in the economy and money markets is the prime reason for the cyclic boom and bust phenomena we are experiencing. Although, at the advent of central banking these cycles were to be "controlled", they got worse. Golly gosh! Whodda thunk it?

Voltaire for one, quote - "A paper currency always returns to it's intrinsic value - zero."

Edited July 11, 2009 by Pliny

[benny]

Marx is Communists spirit. The cult of Marxism must of course replace the Capitalists spirit. Somehow it has something to do with Protestantism.

The Pope is not a Marxist.

[eyeball]

The Pope may not be a Marxist but everyone's a socialist, to some extent, even Pliny.