Yesterday’s gospel reading struck me in relation to the protests which have been continuing to occupy their at once earnest and farcical place on our front pages.
Someone in the crowd said to Jesus, “Teacher, tell my brother to share the inheritance with me.”
He replied to him, “Friend, who appointed me as your judge and arbitrator?”
Then he said to the crowd, “Take care to guard against all greed,
for though one may be rich, one’s life does not consist of possessions.”
Then he told them a parable. “There was a rich man whose land produced a bountiful harvest. He asked himself, “What shall I do, for I do not have space to store my harvest?” And he said, “This is what I shall do: I shall tear down my barns and build larger ones. There I shall store all my grain and other goods and I shall say to myself, “Now as for you, you have so many good things stored up for many years, rest, eat, drink, be merry!”” But God said to him, “You fool, this night your life will be demanded of you; and the things you have prepared, to whom will they belong?” Thus will it be for the one who stores up treasure for himself but is not rich in what matters to God.” (Luke 12:13-21)
What Jesus is doing here is exactly what Christians who put utopian hopes in “social justice” causes in there here and now often accuse more traditional Christians of: When he is asked to step in and enforce a more just distribution of wealth, Christ instead points out that wealth is, itself, a passing thing. That building up wealth in this world will gain us nothing (perhaps worse the nothing) in the next.
It bears emphasizing, this in no way represents an endorsement of injustice or an assertion that those with wealth “deserve” their possessions. Christ’s parable with which he follows up his reply to the wronged brother offers the most harsh fate possible to “the one who stores up treasure for himself but is not rich in what matters to God.” But it is a response rooted not in attempting to right every wrong though some sort of Christian re-ordering of the economy or polity but in a call for conversion, in a reminder that wealth, whether a barn full to bursting or a bank account that runs to billions, will be nothing but a list of missed opportunities in that eternity to which we may be called at any moment.
These protests have me thoroughly confused (not that the bar is very high for that). Some of the points certain protesters make do have some appeal – it is hard not to be sympathetic to those decrying the use of bailout money for huge bonuses to the boneheads who caused the crisis. On the other hand, they seem to be going way overboard in their speech, actions and demands. Seems like a great opportunity for decent reform wasted.
The legitimate aspect of the protests is that there should have been no bailout at all of anyone. The usual procedures to deal with failing banks should have been followed in 2008. What makes the protests completely farcial however, other than their clownish aspects, is that most of the protestors have no objection to bailouts so long as the rest of the “99%” get bailed out from all their debts. That, and free food and drink for life served by fairies from carts pulled by unicorns no doubt.
Charity cannot be forced or enforced which is what happens when things are taken from one and given to another. Charity is volutary, which is the main component missed by the social justice types. They think that true charity is practiced when they support taxing one group to redistribute to another group. This is not the “storing up of treasures that matter” but only a “feel-good” exercise. They would be better off giving thier own possessions volutarily than those of another involuntarily.
The usual procedures to deal with failing banks should have been followed in 2008.
The problem was that the procedures were designed for insolvent deposits-and-loans institutions. Wachovia and Washington Mutual were of this nature and the usual procedures were followed. The troubled institutions included an insurance company, two secondary mortgage brokers, three securities firms, a universal bank with most of its deposits domiciled abroad and heavy involvement in securities markets, and another universal bank brought low by government sponsored marriages with two other troubled institutions. There were not standard procedures for containing and resolving a perfect storm of trouble with institutions of this nature. (While we are at it, what they generally got was bridge lending and loan guarantees. Three or four of these were bailed out in the sense that they got a mess of capital injected into them that has not been paid back).
“The troubled institutions included an insurance company, two secondary mortgage brokers, three securities firms, a universal bank with most of its deposits domiciled abroad and heavy involvement in securities markets, and another universal bank brought low by government sponsored marriages with two other troubled institutions. There were not standard procedures for containing and resolving a perfect storm of trouble with institutions of this nature.”
And in my opinion Art they should have been allowed to fail. That would have unleashed a financial crisis globally no doubt, but I believe that the medicine we took with the bailouts has merely stretched out a boom and bust cycle into what we have had now ever since, an unending recession or mini-depression. The policies of course of the Obama administration have been completely counter-productive, but the great bailout of 2008 set the mold for what followed.
I would also add, in light of yesterday’s first reading, is the call to Faith and holiness. A holiness which ultimately comes not through any material good or effort on our part, but through the grace of God. Those who put their Faith in material goods or social efforts without this end of Faith holiness will ultimately fail.
depending on the food and drink, I might be on board.
Suddenly redistribution looks a little different when you are the one having things redistributed without your consent.
“Occupy Wall Street protesters said yesterday that packs of brazen crooks within their ranks have been robbing their fellow demonstrators blind, making off with pricey cameras, phones and laptops — and even a hefty bundle of donated cash and food.
“Stealing is our biggest problem at the moment,” said Nan Terrie, 18, a kitchen and legal-team volunteer from Fort Lauderdale.”
“Stealing is our biggest problem at the moment,” said Nan Terrie, 18, a kitchen and legal-team volunteer from Fort Lauderdale.”
I am shocked, shocked!!!!
Shocker, isn’t it?
“Pricey cameras, phones and laptops.” Too funny.
I have little doubt that this entire thing has been organized and funded by some bunch of groups aligned with George Soros. Some of these people are the same who show up at the G-20 meetings and riot and destroy everything in sight.
When that bunch came to Pittsburgh (the G-20 protesters) the Pittsburgh Police put up with NOTHING from them.
And in my opinion Art they should have been allowed to fail. That would have unleashed a financial crisis globally no doubt, but I believe that the medicine we took with the bailouts has merely stretched out a boom and bust cycle into what we have had now ever since, an unending recession or mini-depression. The policies of course of the Obama administration have been completely counter-productive, but the great bailout of 2008 set the mold for what followed.
That has been attempted before, with no success, most notably during the period running from the fall of 1929 to the spring of 1932. What you call “the usual procedures” were a consequence of the failure of the previous set of “usual procedures” (conventional bankruptcy law). There is nothing wrong with the current set of ‘usual procedures’, it is just that they need to be elaborated upon to take account of the evolution of the financial sector in the last 30 years. Congress had not done that and the Treasury and the Federal Reserve had to improvise. Neither had the sort of institutional memory the International Monetary Fund has in addressing and containing financial crises and there was also some sort of tenth planet governing the behavior of Henry Paulson and his camarilla. I cannot figure why you would attribute this year’s economic troubles to the TARP program, however messy that program was in its conception or implementation. Bank of America is the only notable TARP recipient currently running a deficit.
“That has been attempted before, with no success, most notably during the period running from the fall of 1929 to the spring of 1932.”
Actually Art Hoover was quite the interventionist in the economy, popular myth to the contrary. Boom and bust had been a constant cycle in American history prior to the Great Depression. I tend to believe that government policies made a recession into the Great Depression. I think Amity Schlaes has made a convincing case on that score. In regard to the Bailout of 2008 it promulgated the illusion that it was necessary to spend vast sums of public money to rescue the economy. I simply do not believe it. Far better to simply let enterprises rise and fall without government intervention, no matter the current pain from hard economic times.
[…] Make Them Share The Wealth With Me – DarwinCatholic, The American Catholic […]
Actually Art Hoover was quite the interventionist in the economy, popular myth to the contrary
He was not, and his interventions account for little of the economic trouble the country experienced during those years.
Mr. Hoover did attempt to persuade the chieftains of commercial corporations not to lower nominal wages. The behavior of employers with regard to wages and cuts in the workforce did differ from the previous contraction in 1920-22, but it is difficult to imagine that attempts at suasion of this sort had any more effect on the behavior of economic actors than did Mr. Carter’s voluntary wage and price guidelines.
Mr. Hoover also put his signature on the Smoot-Hawley tariff. This was not a salutary measure. One should recall, however, that there was in the last quarter of 2008 and the 1st quarter of 2009 an implosion in world trade absent any contrivances such as that, which is to say that the similar implosion which took place after 1929 one might surmise had other drivers. In any case, foreign trade was a small part of the American economy in 1929; about 95% of our production was generated for the domestic market, so the dead weight loss from constraints on trade would have been only a small fraction of the 27% decline in output you saw between the summer of 1929 and the spring of 1933. The injuries of Smoot-Hawley would have been borne by those dependent on exports to the United States (i.e. Canada).
There was a 45% increase in real federal expenditure between the fiscal year concluding in 1929 and that concluding in 1933. Given the implosion in production, that amounted to a doubling of the share of domestic product accounted for by federal expenditure. The thing was, federal expenditure in 1928/29 accounted for only 1.7% of gross domestic product. The economic effects from diverting factors of production would have been notably less than those attending the ramping up of military expenditure in 1940/41, just prior to World War II. The tax increases enacted in 1932 to contain the federal deficit likely injured aggregate demand further. They do not account for much of the observed decline in production, however. The monotonic decline in production finally came to an end in the summer of 1932. Nearly all the damage to the economy had been done prior to when the tax increase went into effect.
There were three waves of bank failures which erupted between November 1930 and March of 1933. The response was standard: the supervisory authority (the Comptroller of the Currency or the state banking supervisor) would close the bank and the matter would be referred to bankruptcy courts. During the last wave (in late 1932 and early 1933), state governments also attempted banking holidays.
Sir Alan Walters has identified the most salient policy error of the Hoover Administration: the retention of the gold standard. The British economic recovery began almost immediately upon its abandonment in September 1931, whereas the American economy continued to decline for another 18 months. The lapse of time between May of 1931 and July of 1932 was just about the most wretched in our economic history. Retention of the existing currency regime does not count as an ‘interventionist’ policy.
Art, I stand by my contention that Hoover was highly interventionist. There was nothing that FDR did, albeit Hoover criticized the New Deal strenuously and correctly, that Hoover was not doing in embryo, as some New Dealers candidly admitted at the time.
http://walter-coffey.suite101.com/president-hoover-worsens-the-great-depression-a150260
http://mises.org/rothbard/AGD/chapter11.asp
http://www.cato.org/pubs/bp/bp122.pdf
Agreed as to Smoot-Hawley.
“In regard to the Bailout of 2008 it promulgated the illusion that it was necessary to spend vast sums of public money to rescue the economy. I simply do not believe it.”
The Great Depression was in a very different monetary regime then we currently have so rehashing arguments as to who(Hoover and FDR) caused the depression is worthless when debating the policies for the current recession. I think it behooves anyone discussing economics to understand how the current monetary system works.
http://pragcap.com/resources/understanding-modern-monetary-system
Art, I stand by my contention that Hoover was highly interventionist
Compared to whom, with what tools, and on what scale? Walter Coffey gives almost no thought to the size or the timing of the various policy measures to which he refers. With regard to the Federal Farm Board, I would assume that the manipulation of commodity prices by public agencies induces deadweight loss (though I would guess that efficiency losses would be considerably less than those following upon price controls). The thing was, you had an average flow of $26 bn dollars in nominal farm production every year as against a revolving fund with a stock of $0.5 bn. Contextually, it could not be that important. With regard to the Reconstruction Finance Corporation, he is arguing a counter-factual: that the economy would have recovered more rapidly without it. He cannot argue that the Corporation is responsible for the economic contraction. The economy had been contracting for two and a half years before it had ever lent one dollar to an ailing enterprise and the economy was growing rapidly for six of the first nine years it was in operation.
I re Amity Shlaes: you need to consult students of the period who put their focus on the most salient information. If you can find a data table or a graph in that book, you are a better sleuth than I am. Look at her bibliography. She manifests scant interests in the literature of economics or economic history. Fewer than five percent of her references are to scholarly treatments in these disciplines. She read a mountain of secondary literature on the the period (general histories, biographies, memoirs, &c.), but very little of what she needed to read to make the argument she is attempting to make.
“Compared to whom, with what tools, and on what scale?”
Compared to every American president before him. Hoover was the precursor of Roosevelt and not the defender of laissez- faire he is painted to be. Ironically FDR when he campaigned against Hoover called for a balanced budget and accused Hoover of wasting money on public works programs. From the Democrat platform of 1932:
“The Democratic Party solemnly promises by appropriate action to put into effect the principles, policies, and reforms herein advocated, and to eradicate the policies, methods, and practices herein condemned. We advocate an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance to accomplish a saving of not less than twenty-five per cent in the cost of the Federal Government. And we call upon the Democratic Party in the states to make a zealous effort to achieve a proportionate result.
We favor maintenance of the national credit by a federal budget annually balanced on the basis of accurate executive estimates within revenues, raised by a system of taxation levied on the principle of ability to pay.”
Then FDR won the election and followed in Hoover’s footsteps.
He did no such thing. The following was done:
1. A bank holiday was declared and a general examination of banks by the Comptroller of the Currency commenced.
2. The dollar was devalued and the convertibility of the dollar into gold suspended; a rapid increase in the money supply was begun.
3. Legislation providing for a revised financial architecture was enacted, which included the erection of the Federal Deposit Insurance Corporation and the Home Owners Loan Corporation.
—
All of these were new departures in policy and the tonic effect was almost immediate, as in within weeks.
—-
I should note in passing w/ regard to the acts of ‘every American president before him’ that the Depression was a global phenomenon. It was not notably severe in some locales (e.g. the Balkans, Ireland), but rapid and severe economic contractions were fairly pervasinve. It would be rather odd to attribute all of this to policy innovations by Mr. Hoover (whose monetary policies were not innovative).
No he continued on with the same interventions in the economy that had been pioneered by Hoover.
In regard to banks, Hoover had Congress pass the Federal Loan Bank Act of 1932:
http://www.u-s-history.com/pages/h1530.html
FDR was following in his footsteps.
In regard to the gold standard FDR did diverge from Hoover’s policy, one of the very few divergences in anything except magnitude in regard to their economic policies.
The act you make reference to was passed in July of 1932. Again, the economic contraction began in July of 1929. There was a period of stasis running from December 1929 to April 1930 and around February and March of 1931. Otherwise the economic decline was monotonic and (after October 1929) fairly rapid. It was in the summer of 1932 that production levels stabilized for a time and showed some mild improvement. The economy began to contract again in the late fall coincident with a mass of bank failures. Two of the Hoover Administration’s most salient interventions (the Federal Reserve attempting open market operations and the advent of the Reconstruction Finance Corporation) post-dated the bulk of the decline and immediately preceded the stabilization of production levels. I assume there is an economist who would argue that the stabilization would have occurred anyway and that the policy measures co-incident with it were of no account. That is not an argument which can be readily evaluated in this forum (and Amity Shlaes does not have the chops for that sort of thing either).
Looks like the Vatican is on the side of the occupiers:
http://www.telegraph.co.uk/finance/financialcrisis/8846595/Vatican-sides-with-anti-capitalist-protesters-and-attacks-global-financial-system.html
Well, that is indeed the headline of the Telegraph based on the interpretation of the famously astute Tom Reese, S.J. I rest my case.
(For background: Reese was removed from his post as editor of the Jesuit magazine America, reportedly at the request of the Vatican, because he was considered a little too crazy to be a good fit even for that sometimes notorious publication.)
Mr. Green, it is generally best not to believe anything that the main stream media says about the Catholic Church if it either supports their views or makes the Church look bad from their point of view.
That goes double for an English source– even these days, the UK has a lot of folks who have no blessed clue and will pass on things they “know” that simply ain’t so.
If you’re interested, American Papist has a break-down of the situation.
Including, sadly, that there is at least one priest helping in the misunderstanding of this letter.
(If you like Catholic blogs, you probably ran across this guy a while ago– he had a banner with that Polish cardinal doing the “YOU GO, DAWG!” type arm/hand signals. Quirky, yet awesome.)
Father Reese was the subject of my first post in my “Jesuitical” series.
http://amcatholic.wordpress.com/2009/05/06/jesuitical/
Heh. Off topic, but it was kind of entertaining reading the troll comments. Can’t say I miss them though.
Didn’t say I believed it, just providing a link that is open to interpretation. I, of course, believe no one, least of all myself.
Wow, you went one up on TREEBEARD? That is hard core. *grin*