Hope & History Rhyme

But finance, free trade and competition are only means, not ends.  From the moment we accepted the idea that the market was always right and that no other opposing factors needed be taken into account, globalization skidded out of control.

M. NICOLAS SARKOZY, President of the French Republic

How do we see each other?

In his book The Value of Nothing, Raj Patel explains the phenomenon of Anton’s Blindness and what it has to do with our global economy.  “[T]his is a rare medical condition that can occur after a stroke or traumatic brain injury, in which its sufferers are blind, but possessed of a fervent belief that they can see.”

“Seeing fellow human beings as mere consumers blinds us to the deeper connections between us, and distorts our political choices,” Patel argues.

When the market is allowed to turn everything into a commodity, society allows it to set our values and determine our worth.  When the market is allowed to correct its own mistakes, we all adopt the human costs of its actions. When markets are all that connect the globe, we give them control over the ties that bind us as people. 

So a new conversation has begun.  Alternative connections are being formed.

At the World Economic Forum in Davos, Switzerland, French President Nicolas Sarkozy made a bold call for fundamental economic reform.

“[A]t bottom we are always talking about the same thing, seen from different points of view: how can we return the economy to the service of mankind?  How can we act to ensure that the economy no longer appears as an end itself, but as a means to an end?  How can we move towards globalisation in which the development of each will assist the development of others?  How can we build a more cooperative, less conflictual form of globalization?”

“We can only save capitalism by rebuilding it, by restoring its moral dimension.”

Last week the United States Supreme Court, in a 5-4 ruling, overturned precedent and allowed corporations to directly contribute to political campaigns.  The opinion grants corporations the free speech rights of human persons.

When corporations are designed as “legal people” and set loose on society with insufficient boundaries, they become maximizing zombies.  Neither living nor dead, they can roam the earth feeding their insatiable hunger free to maximize their consumption while externalizing their risk and consequences.

In his State of the Union address this week, President Obama denounced the Courts decision and made a more specific attack on the most recent causes of the crisis.

“We need to make sure consumers and middle-class families have the information they need to make financial decisions, Obama said. “We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.”

So our conversation continues from different perspectives and different agendas.  As we carry out this conversation may we look around and see all the stakeholders who make the economy work.

May we see them from every continent.

May we see them from every class, race and gender.

May we see their true value.

May we see their humanity.

It has been a week of questions.

In Washington, the Financial Crisis Inquiry Commission or FCIC for CSPAN geeks, held its first public hearing by asking the heads of the top four banks in America how the global economy came so close to the brink.  The New York Times beat the Commission to the punch with some questions of their own in Wednesday’s op-ed section.

“Is there any way in which a synthetic debt obligation adds value to the real economy?”

“What short positions did Wall Street firms have in one another’s shares, and were they also betting against each other using credit default swaps?”

“All deposits insured by the Federal Deposit Insurance Corporation that were held by Wall Street financial conglomerates should have been insulated in separate bank subsidiaries that were prohibited from trading, holding derivative securities and investing in risky assets like equities or bonds with less than a AAA rating. Wouldn’t such safeguards have reduced excess banker risk-taking, thereby reducing the need for taxpayer bailouts?”

These are technical questions (most are arguments, really) with technical answers.  They are all important and go to the heart of what happened and how we prevent it from happening again.

But there are better questions being asked this week.  More important than even who is to blame are the questions that ask how this crisis can change us for the better.

Such as:

What do we believe in?

What do we value?

Who are we responsible to?

What is the common good?

The global financial crisis was the spectacular grand finale of a political philosophy that allowed individual actors to mostly do what they wanted in the certain faith that the market would correct any misjudgments in the long run.  At its core, globalization has allowed the risks and costs of our economy to be passed off to those least able to complain.

If the market was let to die by its own hand, many predicted the end of the economy itself.  Untold suffering would have occurred and there is no knowing just how society would have recovered.

So government stepped in and in an abomination to the market, saved the global economy.

A year later the big banks that were surviving on government credit are now posting record profits.  It is bonus season on Wall Street and those profits are expected to be passed out as huge payouts to individual bankers.

Not everyone was made whole.

The family who lost their house when their Adjustable Rate Mortgage blew up in their faces; The couple nearing retirement who has watched their 401k sink by 40%; the worker who lost his job, his health insurance.

That is not right.

America is where the world sees everyone as rich.  In parts of sub-Sahara Africa, access to clean water is the difference between disease or health, education or illiteracy, food or hunger.  In Ireland, some rode the housing bubble out of poverty and religious conflict.  China struggles with its success in lifting millions out of poverty; taking advantage of global connections while fearing them all the same.

This is their global economy too.  Yet the urge to connect humanity continues to grow, despite the problems.

In his prepared testimony Wednesday Lloyd Blankfein, head of Goldman Sachs, urged, “We should resist a response … that is solely designed around protecting us from the 100-year storm.”

This was not an act of nature.  The crisis is the result of a philosphy run amok and unchecked by a vigilant regulator.

Now Blankfein and his cronies are pressing to return us to the time before the fall.  It is an appealing argument; many of us just want to go back to the good old days.

But we can build something better if we ask the right questions.

How do we build a vibrant, free market that serves the common good?  What policies ensure that, in the words of Cardinal Dionigi Tettamanzi of Genoa, “[M]an does not exist for globalization,” but “globalization for man.”

Capitalism is not a part of nature.  It was built by men and can be mastered by mankind for the common good.

What are we afraid of?

The wreckage of Globalization 1.0 is scattered throughout the planet for everyone to see.  What awaits is a transformation to a better way of connecting the world.  A way that respects human rights; a way that secures justice; a way that does more than shrug its shoulders at the real costs of prosperity.

Give your order to the morning

Shatter the night

Come

Bring your light from the darkness

Complete me and remain in my soul

Make all things new

Show me the way to the abode of light

Release me from myself

The first day, again.

Kevin Baker’s “Barack Hoover Obama” made me roll my eyes in July .  On the eve of the Senate’s passage of a health care bill, Baker’s predictions seem more serious:

Obama will have to directly attack the fortified bastions of the newest “new class”—the makers of the paper economy in which he came of age—if he is to accomplish anything. These interests did not spend fifty years shipping the greatest industrial economy in the history of the world overseas only to be challenged by a newly empowered, green-economy working class. They did not spend much of the past two decades gobbling up previously public sectors such as health care, education, and transportation only to have to compete with a reinvigorated public sector. They mean, even now, to use the bailout to make the government their helpless junior partner, and if they can they will devour every federal dollar available to recoup their own losses, and thereby preclude the use of any monies for the rest of Barack Obama’s splendid vision.

The president was turning friends into enemies, foreign and domestic, this week.  Bad math in politics.

Front and center was the Senate health care bill where desire for a single-payer system became commitment to public option, compromised to Medicare buy-in, conceded to none of the above.

The base is furious, as could be discerned from the parade of  liberal senators coming before MSNBC and Air America microphones to awkwardly talk down desertion.  The lot of them were shaking their fists at Senator Joe Lieberman (I-Connecticut) but it is the president who is protecting a behind-closed-doors deal made with the health insurance and pharmaceutical industries when the legislation was first being drafted.

This is the administration’s deal and it is being held together with pressure from the White House, not on so-called moderate hold outs, but the liberals who carried the legislation this far.

The message could be read on the ashen faces of liberal senators coming before Countdown with Keith Olbermann.  They have lost and accepted the terms of surrender.

By some accounts those terms are quite generous.  Significant subsidies would be given to low and moderate income earners to meet a federal mandate to purchase private insurance in a national market.

Reforms should prevent some of the worst abuses the insurance industry has practiced against its customers and would be customers.  If you believe in such things.

This is not, however, the deal that health care activists signed on for.  Organized labor, liberal senators, bloggers and thousands of activists discovered they were playing at the wrong table only after the game was over.

Across the Atlantic today, the president returns to Copenhagen where only weeks ago he was locked out of the private deal for the 2016 Olympic Games.  At the conclusion of the United Nations climate talks, the administration is again trying to craft a deal.

The week in Copenhagen started out badly with delegates from 77 developing nations storming out of the talks when it was learned that a separate document was being drafted in secret talks between wealthy nations.  The delegations returned the next day.

Secretary of State Hillary Clinton raised the stakes, with an offer to contribute the American’s “share”of the $100 billion each year the World Bank estimates poor nations would need in aid to deal with the effects of climate change and adapt their technologies to lower carbon emissions.

The Wall Street Journal called the $100 billion figure a shakedown arguing, “More than anything else, Monday’s walkout revealed the real reason that the developing world is in Copenhagen in the first place: They see climate change as a potential foreign-aid bonanza, and they are at the table to leverage the West’s environmental angst into massive transfers of wealth.”

Naomi Klein saw sinister motives in the American offer as well, but considered it “blackmail” from the developing world in exchange for acceptance of weaker emission limits on the developed nations. “…forcing developing countries to choose between a strong fair deal that stands a chance of averting climate chaos and the funds they need to cope with the droughts and floods that have already arrived.”

This is the Obama administration’s Bad Deal: terms crafted away from the transparent sideshows and offered only as an alternative to total failure.  The past is prologue for the desperate as financial reform legislation moves forward next year.

The same holds true as the G20 attempts to build some structure to the global economy.  If you can’t walk away from negotiations, the terms are ransom.

A small group of climate activists shut down part of the Chicago financial district today to protest cap and trade proposals.  Here are some raw photos:

The American Roman Catholic Bishops scored a major political coup last week.  By working for and passing the Stupak Amendment in the House of Representatives’ health insurance reform bill, the bishops advanced their will to ban all federal subsidies for elective abortions in private insurance.

The bishops worked the halls of Capitol Hill like K Street lobbyists.  They crushed over delicate efforts to segregate federal dollars from abortion services and wrote letters to Catholic members calling their communion with the Church, “flawed”.

No matter what one thinks of the results, the efforts of the bishops were impressive.  Now that the House health care bill’s abortion language meets their approval, the bishops have lost their zeal.

A statement after the House vote by Francis Cardinal George, president of the United States Conference of Catholic Bishops celebrated the new abortion provision but offered only tepid, milquetoast support for health care reform as a whole.  “We remain deeply concerned about other aspects of health care reform…” George said.  “In the national discussion on how to provide the best kind of health care, we bishops do not claim or present ourselves as experts on health care policy.”

George goes on to state that the bishops think the nation’s health care system needs reform, “which protects human life and dignity and serves the poor and vulnerable,” but offers no opinion as to whether the bill they had just altered was worth supporting.

It is hard to think of any health care bill that wouldn’t meet the bishop’s criteria, so long as it’s not presented to experts.  The bishops are more and more willing to use fundamental justice doctrine as a sacrificial lamb to serve another agenda.

The Washington Post reported on Thursday that the Archdiocese of Washington (D.C.) threatened to discontinue social services unless the District made changes to a same-sex marriage proposal.  “Under the bill, headed for a D.C. Council vote next month, religious organizations would not be required to perform or make space available for same-sex weddings.  But they would have to obey city laws prohibiting discrimination against gay men and lesbians.”

As one of dozens of social services providers in the District, Catholic Charities’ impact on fighting poverty is arguable, but the D.C. Council may be willing to let the Archdiocese follow through on its threat.  “Terry Lynch, head of the Downtown Cluster of Congregations, said he did not know of any other group in the city that was making such a threat,” the Post said.

The Church has taken many actions in a campaign against extending rights to homosexuals from the recent referendum on gay marriage in Maine to the Vatican’s new structure to allow Anglicans, including married priests, to become Roman Catholics in full communion.  The new structure is largely an opportunistic grab for traditionalist Anglicans upset about their church’s acceptance of gay bishops and same-sex marriages.

But what has taken place in Washington and Congress is an even more cynical betrayal of one part of Catholic doctrine in order to advance another.  The fact that the bishops bring a moral force to any debate is undisputed.  They can bring the language of social justice and common good in a way that liberals have been afraid to do for decades out of fear of being branded as socialists or worse.

The doctrine is there, written long ago, it represents the best practices of the Gospels.  But, whether it is in health care, job rights, financial justice, or environmental stewardship the Vatican and the American bishops are passive.  They rest on the laurels of past campaigns and save their energy for the next battle of the culture war.

Writer Andrew Sullivan has also noticed the trend.

I am struck by the emphases of the American hierarchy these past few months.  On health insurance, there is far more public emphasis on preventing anyone who wants to get an insurance policy from the new government-run exchanges from getting an abortion (even if she pays for it herself) than on the core principle of health care as a human right (in Catholic doctrine).

 

I can see that both principles are valid, but the intensity of the campaign against one compared with the lackadaisical interest in the other seems unbalanced to me.  The hierarchy’s growing fusion with fundamentalist Republican politics is becoming harder and harder to ignore.  They can turn a blind eye to state-sanctioned torture, and to the suffering of those without healthcare, but when it comes to ensuring that gay couples are kept stigmatized or that non-Catholic women can’t have access to abortion in a secular society, they come alive.

It was not always like this.  George’s predecessor, Joseph Cardinal Berardin worked not only for social justice but for common ground with people inside and outside of the Church.

Bernardin told the National Press Club in 1994 how his “Consistent Ethic of Life” applied to the last debate over health care reform and Catholic teaching specifically.  “The foundation for all of these discussions is a deep conviction about the nature of human life, namely, that human life is sacred.”  Bernardin said, “…will reform protect human life and enhance dignity?”

In a consistent ethic of life, however, abortion is not the beginning and the end of the debate.  Bernardin saw reform as necessary to maintaining the moral order.  He described it as part of a legacy of justice from both our religious and secular traditions.

Bernardin went on to quote Catholic theologian Philip Keane who wrote, “…justice shifts our thinking from what we claim from each other to what we owe to each other.  Justice is about duties and responsibilities, about building the good community.”

It is that sense of justice that inspired Bernardin to say, “When I speak of universal coverage, I do not mean a vague promise or a rhetorical preamble to legislation, but the practical means and sufficient investment to permit all to obtain decent health care on a regular basis.”

Bernardin found the expertise to speak about medical underwriting, preexisting condition exclusion, and insurance red-lining.  “Actuarial pricing designed to protect insurance company assets pits one group against another-the old against the young, the sick against the healthy-thus undermining the solidarity of the whole community.”

Bernardin had the clear eyes to see what was wrong with the health insurance system and the conviction to call for reforms consistent with Catholic values.  Where is that among the bishops today?

 

 

 

Then Peter approaching asked him, “Lord, if my brother sins against me, how often must I forgive him? As many as seven times?”

 

Jesus answered, “I say to you, not seven times but seventy-seven times.

 

That is why the kingdom of heaven may be likened to a king who decided to settle accounts with his servants.

 

When he began the accounting, a debtor was brought before him who owed him a huge amount.

 

Since he had no way of paying it back, his master ordered him to be sold, along with his wife, his children, and all his property, in payment of the debt.

 

At that, the servant fell down, did him homage, and said, ‘Be patient with me, and I will pay you back in full.’

 

Moved with compassion the master of that servant let him go and forgave him the loan.

 

When that servant had left, he found one of his fellow servants who owed him a much smaller amount.  He seized him and started to choke him, demanding, ‘Pay back what you owe.’

 

Falling to his knees, his fellow servant begged him, ‘Be patient with me, and I will pay you back.’

 

But he refused. Instead, he had him put in prison until he paid back the debt.

 

Now when his fellow servants saw what had happened, they were deeply disturbed, and went to their master and reported the whole affair.

 

His master summoned him and said to him, ‘You wicked servant! I forgave you your entire debt because you begged me to.

 

Should you not have had pity on your fellow servant, as I had pity on you?’

 

Then in anger his master handed him over to the torturers until he should pay back the whole debt.

 

So will my heavenly Father do to you, unless each of you forgives his brother from his heart.”

 

MATTHEW 18:21-35

 

 

Matthew is writing about grace.  Forgiveness for the undeserving.

 In the middle of a global financial crisis, we can look across the millennium to the ungrateful servant for wisdom.  Some big debts have been wiped off the books.  Or wiped… we’re not quite sure where.  Many debts abide.

 Last year the failure of some of the nation’s largest financial firms threatened to cause a conflagration across the entire global economy.  The U.S. Treasury acted by infusing a quarter of $1 trillion in blank checks throughout the banking sector.

 Some firms survived others did not.  And some banks have grown fatter on the remains of the fallen.

 The Toxic Asset Relief Program (TARP) was intended to make the banks whole again.  It would wipe bad debts off the firms’ books so that they could begin lending again. Neither has happened.

 The reality of it all has been cold.  Across the economy, different parts of society have been broken by job loss, foreclosure, and business failures.  For the most part, these debts are unforgiven.

  You could see the unforgiven throughout the crowd at Tuesday’s march on the National Bankers Association.  Over 2,000 people converged on the Sheraton Hotel in Chicago where the bankers were holding their annual conference.

 One speaker, Maria Garcia claimed her home was in foreclosure by Chase because she co-signed for a brother-in-law who lost his job.  Garcia is losing her equity, including  a $50,000 down payment.  Her home will become a drop in a sea of board-ups drowning neighborhoods once again in decline.

 

When Garcia called the bank to try and arrange some alternative financing, she claims she was asked, “Why don’t you pay your bills like everyone else?”  Well, almost everyone.

 

 Another woman in the crowd kept yelling, “Give us back our money!” over and over again.  She explained to a fellow that she had also been foreclosed on.  Nobody was paid Tuesday.  Thousands stood and yelled and gave witness to each others’ misfortune.

Which is not to say that the organizers were without solutions.   Showdown In Chicago, an umbrella group of unions, faith communities, and neighborhood organizations that marched this week have called for greater banking regulation, ending the “too big to fail” doctrine, and the establishment of a Consumer Protection Agency that would evaluate the risk of financial products to consumers.  The National Bankers Association is opposed to each measure.

 And so it stands,  with the Obama Administration pushing banking regulatory reforms through Congress, the bankers remain defiant.  The ABA protests that they are working on the solutions to the financial crisis themselves, thank you.

Move along; nothing to see here.

Ignoring the gambling that caused the financial crisis and the behavior of the bailed out institutions in the aftermath has been graceless in the extreme.  And it will take grace to find a way to justice.

How do you define justice?  Is it making people whole?  Is it restoring right relationships between individuals and their institutions?

The Book of Leviticus states, ” Seven weeks of years shall you count–so that the seven cycles amount to forty-nine years.  Then, on the tenth day of the the seventh month let the trumpet resound; on this, the Day of Atonement, the trumpet blast shall re-echo throughout your land.  This fiftieth year you shall make sacred by proclaiming liberty in the land for all its inhabitants.  It shall be a jubilee for you, when every one of you shall return to his own property, every one to his own family estate.”

 

Of course, things are much more complicated today.

It has been just over a year since the Treasury Department forced the largest government intervention in the financial sector in American history.  According to Donald L. Barlett and James B. Steele in Vanity Fair magazine, Treasury Secretary Henry Paulson wrote in a memo to the nine largest American banks, “If capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance.”

“Treasury had prepared a form with blank spaces for the name of the bank and the amount of TARP money requested,”  Barlett and Steele explain.  “Each CEO filled in the two blanks by hand - $10 billion, $15 billion, $25 billion, whatever - and then signed and dated the document.  That was all it took.” With that $125 billion was gone.

The TARP form distributing another $125 to smaller banks consisted of, according to Barlett and Steele, “two pages, most of it white space.”  “The application was only 24 lines long…”

 Lost in the speed and efficiency of the TARP application process was any accountability as to what would be done with the money and when or if the money would be returned.  For the most part, nobody knows what is being done with the bailout money.  Some of the TARP recipients have gone on to exploit their borrowers through high credit card interest rates, predatory loans and of course foreclosures.

 The shameless resilience of the system is both frightening and laughable.  On Monday a large group of protesters were rallying in front of  Goldman Sachs’ Chicago headquarters. Suddenly three enterprising women, dressed in bright pink and green jockey costumes, began to pass out fliers for an online horse betting company.  The first $50 bet is free.

 The crap game moves on, a step ahead, making it even easier to lose your money.

 The Day of Atonement has been deferred.  A simpler start might be a Day of Accounting to determine where exactly all that money went.  Accountability is the beginning of reconciliation.

 On that day of reconciliation we may find the money, and the grace, to build again.

Pictures from today’s march on the National Bankers Association led by the SEIU:

Some pictures from the protests at Goldman Sachs’ and Wells Fargo’s Chicago headquarters: