Obama should heed
what the Pope says in CIV
Translated from
August 3, 2009
The worldwide economic crisis continues, even if the president of the United States claims the recession has ended. And after that 'news' has sufficiently been talked about - often without having been read at all - banker-economist Ettore Gotti Tedeschi, says it's time to get back to
Caritas in veritate.
He says it is a text all economists should read if they really want to understand 'what did not work'. To begin with, that ethics alone will not rescue mankind from the crisis.
What is the meaning of the close linkage that the encyclical attributes to charity and truth? In other words, is there a 'true' economy, or is it merely an instrument, though complex, for producing wealth?
The economy itself, if it does away with truth, negates itself, and as such, would no longer exist. To understand this, one does not have to be an economist. The crisis shows that, maes it understood by anyone who has an iota of perspicacity, that an economy which does not deal with truth is impossible - unless it is aiming for resulte other than what is there for all to see. In this sense, the crisis is a great macroscopic lesson that should not be wasted.
So, NO to an economy without truth. Are we then sending economists to religious instruction now?
Nothing of the sort! By a truthful economy, I mean that there cannot be an economy conceived as extraneous to certain laws that are written in things and are therfore at the basis of economic activity.
For example, the relationship between means and ends. If the economy of means becomes the end, then all we have is an instrument to multiply wealth at any cost. Man should know how to use the means of which he disposes. To know how to do this, he should know his ends.
It's not usual that one talks economics with a banker and hears him speak of 'laws written in things;.
If the laws of nature are not respected, the outcome will directly go against him who seeks to manipulate these laws.
And by natural law, I mean, first of all, as I explained, the relationship between means and ends. Whenever the multiplication of wealth - as, for instance, through the use of innovat6ive financial instruments - becomes an end in itself, the result is what we have seen.
We do not have to speak of God. We are talking about the economy, and this is what the encyclical does, just as
Populorum progressio snd
Centesimus annus did.
Therefore, the relationship between economics and ethics should be re-established, having been lost in the crisis?
No. It is not ethics that will save mankind from this crisis. If we wish to have an economy that is more respectful of morality, all it takes is simply - one might say - to be a good economist.
The relationship between ethics and economics is not in the fact that he who makes the economy decides to be more moral, or that he takes time to pray, but in this: that he practice good economics.
What creates prosperity is the good use of those particular instruments - economic instruments in this case, that nature - meaning the gifts we have been endowed with, has placed at our disposition.
The American president has said that we are nearing the end of the recession. Do you agree?
Look, to be able to say that, one must have the information that is avilable to the President of the United States, but I don't have such facts. To understand Obama's recent statements, I would start from what is probably his own starting point: that confidence is a scarce resource these days. Therefore, it is essential to increase confidence. But, I must add, one must do this with pragmatism and concreteness. And the wisdom to change course.
What has changed in the country that is the leader of world capitalism?
The crisis has shown us a perverse situation in which it is the American families who have been subsidizing the state. Instead of being served by the state, the people have served the state. [Does he mean the obvious? That by incurring massive debt, the govenment is really passing it on to the people who must pay out this debt, even unto coming generations?
But the debt-ridden life of American families has been the most obvious sign of how the state and the system can feed and lead to a lifestyle that produces an illusory, tricked-up economic development in order to increase the US domestic national product.
It was not by chance that Obama said at the start of the last G20 meeting, "We Americans should stop living above our means".
[It is only fair that Gotti Tedeschi should have pointed out that the Obama administration itself is contradicting that dictum, amassing unheard-of trillions in debt and deficit in Obama's first six months alone through astronomical spending bills. And now wanting to add yet more trillions through an ill-conceived healthcare reform that would let the government take over 20% more of the country's economy - after housing, mortgages, banks and the car industry.]
To admit that means acknolwedging that consumerism and living on credit caused the disaster.
Yes, and it is not I who is saying this. The president of the United States said so. American families have lost the little savings they have, they have lost their pension funds that were invested in stocks, they find themselves having to pay years of credit, and they must face rising unemployment.
[But all that wasn't the fault of 'American families' in general! It was the fault of a government that encouraged people to buy homes they could not afford [policies put in place as an entitlement for low-income Americans by the Democrats under Clinton] and a financial system that assured unprecedented profit for those who knew how to manipulate the system. The huge American middle class in between these lowest and highest levels of the economic hierarchy has ended up being the most aggrieved victim.]
Obama cannot just say that the recession is behind us - he should also explain why he thinks it is over, and he should explain why it should never repeat itself.
[I find it very odd that Gotti Tedeschi says nothing of the Obama administration's willfully counter-productive strategy - and evident record thus far - of spending even more, under the pretext that more government spending, more government debt and deficit, more government intervention in the daily lives of American,. is the way out of the crisis. Why does he criticize the American people but not the government?]
Let us widen our field of observation. Did the recent 'G2' summit between the USA and China create the weight-bearing axle that will carry global economics and poltiticis in this century? And what role would Europe have?
The United States wants a strategic alliance with China because China has what teh US does not have: enormous capacity for investment and consumership. That is pr4ecisely what the United States needs.
China is destined to increase its influence and to become the world's primary economic power.
But I do not believe that there will be a true and proper US-China axis. Simply because China does not look at the US, as the US looks at China.
I see China as opportunistically leaning to the USA today but strategically addressing itself to Europe. Rather than merely 'chimerical', China's influence will be real - it is investing massively in the USA and it is very much interested in the Mediterranean region, where it has been exporting people, capital and productive capacity. We can all expect completely new scenarios and a new balance of power.