Busted: Bankers and The Global Economy

July 16, 2009

Global Economic Crisis: G8 and the Papacy

G8 ItalyDuring the G8 economic meetings and debate in Italy, Pope Benedict released a new encyclical saying “there is urgent need of a true world political authority.” In that document, Pope Benedict XVI urged G8 leaders meeting in Italy to rewrite global financial rules and to defend the world’s poor from the effects of the economic crisis.

responsibility of the market

In and of itself, the market is not, and must not become, the place where the strong subdue the weak. Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations. Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man’s darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.

responsibility of business

Owing to their growth in scale and the need for more and more capital, it is becoming increasingly rare for business enterprises to be in the hands of a stable director who feels responsible in the long term, not just the short term, for the life and the results of his company, and it is becoming increasingly rare for businesses to depend on a single territory. Moreover, the so-called outsourcing of production can weaken the company’s sense of responsibility towards the stakeholders — namely the workers, the suppliers, the consumers, the natural environment and broader society — in favour of the shareholders, who are not tied to a specific geographical area and who therefore enjoy extraordinary mobility. ...business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference.

The papacy has taken an interesting step by inserting itself into the G8 debate framework and  by ordering the involvement of Italy in the process. Certainly, in much earlier times, the papacy was directly involved in such matters without better consequences in those times. History is the best  witness of that truth. Now, the pope indicates that we need a man in charge once again as if the G8 institution is really in charge beyond politics. The real charge has been given to multinational corporations including central bankers on a global basis. The central bankers operate as a global corporate fraternal brotherhood through none other than the Swiss and Rome. Is the papacy and politics going to ‘take authority back’ or have they really lost any authority? The reality is that the papacy already holds ‘such coveted authority’ through the central bankers. Most of them have simply forgotten their moral compass in their need to service their clients. Pope Benedict is simply reminding his league that he holds them to a higher priority and that they need to exert a new influence as they continue to profit from money lending.

G8 first ladies and pope

September 22, 2008

Robbery from American Taxpayers

bailout or pork barrel?

bailout or pork barrel?

“It is a big package because it’s a big problem,” Bush told reporters at a news conference. “The risk of doing nothing far outweighs the risk of the package.” Yet, most Americans seems to be irritated, if not entirely incensed about the prospect of bailing out wealthy bankers and insurance companies along with buying up worthless securitized bonds built by greed and corruption. Do Americans seem to care, even though authorities say that the alternative is total economic devastation? Americans do care, but realize that what the Bush Administration intends to do is not without substantial risk. Even more important are the real moral principles involved in the bailout. Moral and ethical concerns is exactly what the Bush Administration, Republicans and the Congress have been bereft of during the last two terms of office. An undercurrent of seething rage foments in the underground of American souls.

Americans have focused most of their indignation on having to foot the bill for irresponsible lenders and borrowers. The fact that little benefit to the economy or decent jobs for the American people will result from the trillion dollar bailout doesn’t make the bitter pill easier to swallow. However, the fact that Main Street America will suffer has some Americans rethinking their position.

the legacy of Bush

the legacy of Bush

What Americans fail to realize is the economic devastation that will plague America regardless of a bailout. The U.S. economy is in a king-sized pickle with a stalled economy and poor prospects. Politicians and economists alike seem to have temporarily forgotten that bailout or not, stagflation is on the way, a difficult prospect that the panicked authorities have suddenly ignored in the interest of saving their immediate power. The trillion dollar economic bailout is not a miracle, just a different road down the same mountain of decline.

A few have suggested that the bailout is not a bailout. The government is not handing out cash and have advertised that they might actually stand to make a great deal of money out of this. The bottom line is that when the bad securitized bonds gain value, that value will trickle down to the American taxpayer. The big problem is that most Americans no longer believe in the lie of “trickle-down economics,” a political theory that seems to have been fully subverted by bad business practices, corrupt politics and even more incompetent regulators while Americans follow the rules. Furthermore, money doesn’t trickle down from government except through the welfare system. This make the prospect of “trickle down” even more unlikely and unpalatable. The taxpayer does not expect to see the money, but knows that the government will continue to spend with wild abandon. The national rage is palpable as American taxpayers are made to bail out the world. ~ E. Manning

November 28, 2007

Fed Seeks Avoiding Moral Hazard

Filed under: banking, federal reserve, government, money — Tags: , , , , , , — digitaleconomy @ 3:17 pm

The Fed reminds all that will listen that they don’t cover the increasing losses in the market place and that these losses should be borne by the market and borrowers. Too bad the Bush Administration hasn’t felt the same way by allowing the reckless conduct of the finance and mortgage industry. Ultimately, the citizens of the U.S. pay, not the profit takers. The Fed is padded at 110% for every loan they make. The U.S. banks and finance industry haven’t been so wise. Their short-sightedness and speculative nature has come back to haunt them.

“Central banks seek to promote financial stability while avoiding the creation of moral hazard. People should bear the consequences of their decisions about lending, borrowing, and managing their portfolios, both when those decisions turn out to be wise and when they turn out to be ill advised.”
~ Fed Vice Chairman Donald L. Kohn

Financial Markets and Central Banking, November 28, 2007

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