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

June 10, 2008

What are the Feds Doing with Stimulus Money?

President Bush signed the Economic Stimulus Act of 2008 back on February 13, calling his stimulus idea a “booster shot” for the American economy. At the signing ceremony, Bush stated, “The bill I’m signing today is large enough to have an impact, amounting to more than $152 billion this year, or about 1 percent of the GDP (gross domestic product).”

At that time, the government mandated that checks be issued to qualified citizens through May. The process has dragged on through June. Some Americans have not received their promised stimulus payments through the Internal Revenue Service.

Barack Obama is circling the country in a two-week campaign. He is proposing that lawmakers should inject another $50 billion immediately into the sluggish U.S. economy. Mr. Obama noted the largest monthly increase in the unemployment rate in over 20 years. He intends to use his position in the Senate to generate a movement for “another round of fiscal stimulus, an immediate $50 billion to help those who’ve been hit hardest by this economic downturn.”

Mr. Obama supports the expansion and extension of unemployment benefits, as well as a second round of tax rebate checks. “Relief can’t wait until the next president takes office.”

Federal unemployment benefits for people out of work are usually limited to 26 weeks. A movement of Democrats wants to add another 13 weeks plus an additional 13 weeks in states with unemployment of 6% or more. President Bush has previously been against extending unemployment benefits, preferring to bail out imprudent banks and mortgagers.

On June 6, the Treasury Department reported that it has sent out nearly 67 million in stimulus payments worth approximately $57 billion. Now the important question comes to mind. The stimulus package was advertised as a $152 billion stimulus. Where is the remaining $95 billion stipulated by the first stimulus plan?

Now, we are talking about a new stimulus plan as if the first stimulus plan is complete. Where did the money go? What is Washington up to? Is the stimulus a straw dog of sorts? Has economic stimulus become mere hype?

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June 8, 2008

Oil: Business as Usual

You’ve heard the recital before, but now in concert. Leading energy-consuming nations urged oil producers to boost their output to counter soaring prices threatening the world economy, while they pledged to develop clean energy technologies and improve efficiency. This is like promising to be a good boy for a stick of candy. The only problem is the general store is all out of candy.

The gathering of national ministers vowed to diversify their sources of energy, invest in alternative and renewable fuels, ramp up cooperation in strategic oil stocks in case of a supply shortage, and improve the quality of data on production and inventories available to markets.

If anyone, including the United States, was really serious about energy problems, half of the vehicles being driven today would be electric or hybrid, with heavy market emphasis on phasing out ordinary petroleum dependent vehicles. Bankers would cast a suspicious eye on anyone that continued to invest in the outdated iron horses, thus weaning the system from oil. The bottom line is that nobody is interested until the future becomes entirely blackened by economic troubles based in part on high energy costs. As it is, this country and the world is years behind on shifting fuel technology gears because of subsidies and reliance on business as usual.

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