What is wrong with capitalism?

[Abu]

essie7777 #328
For example; on average big business have seen a decline on average of close to 30% in turnover in 2010, the market estimation would see a business reducing wages by 30%, as the market can be commonly estimated at the same value.

Such a simplistic example to caricature “common estimation of the market” as reducing the market wage level in any particular business or area by the same percentage betrays a lack of knowledge of commerce and economics as here, but “reducing wages” in a business decline does NOT necessarily mean reducing the wage paid to any individual, but is dependant on the percentage of total outlay on wages, and might mean any or all of reducing prices, finding new markets, working shorter hours, changing the product mix, laying off some individuals, dependant on the managerial assessment of future sales volume and returns for any particular business.

chevalier #329
The problem with “agreed upon by the parties” is that economic necessity or lack of other options will make parties agree to unfair deals. People will agree to 16 hours at $5 per hour if their alternative is joblessness. This doesn’t make it morally good to hire people for 16 hours a day at $5 per (unless you actually can’t pay more or perhaps you don’t actually cut much of a profit on that work, and the people concerned would rather work for you so cheaply than not at all).

The assumed problem apart from its constructed specifics, evades the fact that what are portrayed as “unfair deals” may be advantageous for an area, and a business and its employees, if people can actually be constructively engaged in services or production of goods at a lower rate during a prolonged downturn rather than be unemployed and getting welfare.

The “problem” is no argument against an agreed wage in a free market democracy. What is always a problem are human vices which the Church identifies.

John21652,
I wish you luck in getting an answer that faces reality, but won’t hold my breath.

 

[essie7777]

And you’ve done it all over again.

And instead of answering the question, you respond with this diatribe

Even you good friend Abu has managed to read the post that answers the question you so insultingly asked for twice after it was posted. … note i didn’t attach the full comment as i am sure you can find it yourself – hint look before the ones where you try so hard to sound as if you have a point but simply come across as ignorant of the content of the comments!

John21652, I wish you luck in getting an answer that faces reality, but won’t hold my breath.

And as you claim this shouldn’t highlight your ignorant inability to follow the comments appropriately??? What else would you call it.

your inability to answer a question about a statement that never made sense in the first place is just stretching credulity too far.

As above … AGAIN

To refresh your memory, the question was -
Now you are allowed 6000 words in a single post. Why don’t you write as many words as you can, up to and including 6000 words if you need that many, explaining the difference to all we ignoramuses and non-attentive, unintelligent posters. And maybe have a try at doing so without writing opinions about the mental states of other posters and without making sweeping statements based on sweeping judgements about what others might mean. Go on then, have a good crack at it. We wait with bated breath

LOL LOL

And for the people not paying attention already answered and commented on by your good friend Abu – did you miss that comment in your blindly desperate aim to throw insults and appear as ignorant of the content as you do (as asked above i’m waiting for the word you feel is more appropriate for someone who asks for a comment TWICE after it was posted and after its been commented on)

You really do make it so easy to discount your ramblings …as there is no substance at all to what you say --generally human nature dictates that the people who shout loudest at one singular person are in fact most threatened by that person … so i wonder whats your motivation for attacking me as you have done since your first post, when you ignore the other posters who agree with my point of view and also disagree with Abu?

Abu has the common decency to respond to questions and offer his opinions in an format that moves the discussion forward. I don’t have to agree with him to respect that.

You, sir, however are nothing more than a nuisance. You haven’t added anything to the conversation apart from sarcasm, ridiculous “shout outs” and bland accusations of ignoring question, when in fact its your own “blindness” that hasn’t bothered to see them – as if you had where would you insult then!

 

[essie7777]

Such a simplistic example to caricature “common estimation of the market” as reducing the market wage level in any particular business or area by the same percentage betrays a lack of knowledge of commerce and economics as here, but “reducing wages” in a business decline does NOT necessarily mean reducing the wage paid to any individual,

I will admit to being confused when you state the “caricature” used shows a lack of understanding then go on to point out that it doesn’t “necessarily mean that”. So you are saying i have demonstrated it but you think its too simplistic. Thats different than not understanding the concept --as i am sure my previous professor would argue i fully understand the economics …i’m simply keeping the example in reality rather than theory.

Surely though after posting so often about the realistic consequence you are not trying to say that the simplistic (and i used this on purpose!) picture doesn’t have huge flaws.

The main crux of Catholic Teaching is about “just” wages how then do you propose that the worker is protected to ensure they receive just wages to be able to live.

If i understand correctly, here in the US the minimum wage is a very low $7.25 on the federal level.

If you presume someone works 40hrs a week, which is full time – they would earn just around $15k per year. The poverty line is just below $11k for one person. So assuming that the employee is single they need to survive on barely over the poverty line. I haven’t lived all over the US but in my state average rent for a one bed apartment is $700 per month, say basic utilities(gas and electric, water,sewage) are $100 (i am guessing here), say food is $200 per month (and someone is not eating well on this amount) already a person is left with about $250 to spend on healthcare, transport (whether public or car etc.), telephone for their job as i imagine life without would be very difficult, clothes, emergencies, furniture etc.

That’s hardly doing anything more than surviving.

As chevalier #329 pointed out and you quoted, creating a situation where someone accepts an unfair deal simply because it is the best deal is hardly just by Catholic standards.

Your comment that:

The assumed problem apart from its constructed specifics, evades the fact that what are portrayed as “unfair deals” may be advantageous for an area, and a business and its employees, if people can actually be constructively engaged in services or production of goods at a lower rate during a prolonged downturn rather than be unemployed and getting welfare.

This is a little scary – you seem to be arguing that if a person is forced into poverty then they should feel they are better off because they at least have a job. And then ironically state that its better than welfare …however the unfair deal comment was in relation to your comments against welfare state so in the scenario you are advocating there is no welfare state.

Whilst your argument allows for people to work for “unjust” wages, throwing them into poverty and desperation, you seem to advocate this is all good because the business survives … are you not simply pushing capitalism at any cost – business over people and rights are lost in the mix because why should business that can not compete with fair livable wages (which aren’t huge as demonstrated above) be forced to behave responsibly?

What is always a problem are human vices which the Church identifies.

absolutely, and although you may disagree with me the reality of what you suggest could well be even worse than the example i used above as without control and legal minimum wages and rights those human vices are unchecked. How then do you suggest controlling the abuse that the system you so strongly advocate can so easily produce? Would US workers need to be earning equivalent wages to third world countries where the “common estimation” of the business pushes wages to unbelievable wages of dollars per month? Would that convince you that theory is great in books but practical implementation usually requires compromise and a large “reality check”. It is rare that theory translates to working practical model in it’s entirety.

Surely you can see that the theory you advocate is simply unsustainable … every economic structure needs checks and balances and the Catholic Church always puts people first so when you leave them without protection this is inherently wrong.

John21652, I wish you luck in getting an answer that faces reality, but won’t hold my breath.

At least you acknowledge an answer was given! Disagreeing is surely the point of discussion and debate.

 

[chevalier]

Ya think??

Well hate to break it to ya, Econ 101 is companies just like a family need profits to survive. Only govt like can survive on deficits.

Please. The purpose of profit is not limited to bare survival. Presenting that as basic economy or me as not very bright will not cut it.

 

[John21652]

Even you good friend Abu has managed to read the post that answers the question you so insultingly asked for twice after it was posted. … note i didn’t attach the full comment as i am sure you can find it yourself – hint look before the ones where you try so hard to sound as if you have a point but simply come across as ignorant of the content of the comments!

You amaze me, you really do. I have asked you twice to explain the difference between two points you made and still you avoid doing so. Why is that? Even Abu is struggling to understand you, because he wrote

John21652, I wish you luck in getting an answer that faces reality, but won’t hold my breath.

. And of course, David Castelan pointed out something to you you should have heeded -

**I am amazed, Essie, at your comments. You only give propositions and provide no evidence , data or valid arguements while Abu is constantly providing consistant data. I try not to comment as Abu does a far far far better job supporting my cause so my comments wil onlyl take up space, but when his adversaries provide nothing but Ad Homen responses … well here I go… **

To refresh your memory, a few pages back I asked a very simple little question, which was -

So, maybe you could explain the difference between an “amount agreed upon by the parties” and the “common estimation of the market”.

Notice the key word in that question? It is “difference”. Apart from a simplistic attempt at being descriptive, you have studiously avoided answering and you have done so with blatant insults and derogatory remarks, as evidenced by this -

And as you claim this shouldn’t highlight your ignorant inability to follow the comments appropriately??? What else would you call it. … I don’t have to agree with him to respect that. You, sir, however are nothing more than a nuisance. You haven’t added anything to the conversation apart from sarcasm, ridiculous “shout outs” and bland accusations of ignoring question, when in fact its your own “blindness” that hasn’t bothered to see them – as if you had where would you insult then!

Apart from quoting others to show you how it is you avoid direct answers, I do believe the only one writing insults around here is you. It seems to be a habit of yours; or perhaps an attempt at deflecting the focus away from questions you wont, or can’t, answer. And it was such a simple question really… Well, I have some more for you. In post #305 you mocked Abu, who stated in wrote in post #303 -

As the Welfare State has helped Europe to its present meltdown,

You responded in post #305 with this -

Nothing like distilling a global economic crisis created and started by US greed and lack of regulation (because obviously you can not infringe on US “freedom”) down to the fact its the welfare state that’s creating the European meltdown! Seriously are you truly that naive that you don’t think there are numerous reasons for economic strife???

Your response was illogical, rude and off topic. Evading the question once again, it would seem. Furthermore, in post #312 you stated -

I’d challenge that unfortunately you don’t seem to have any true understanding of complex macro economics and certainly can’t explain or define free enterprise correctly.

The obvious inference is thay you do indeed have a great and wondrous understanding of macro economics. It seems that Abu’s seemingly innocuous comment about a connection between the welfare state and Europe’s economic meltdown is, in your most learned opinion, ludicrous. In light of that and all the while ignoring your insulting and derogatory tone for the moment, I’d like to ask you the following questions -

Can you please explain the connection between the implementation of the extremely generous Greek welfare payments and the ensuing crisis and “US greed and lack of regulation”?

Could you also please explain the connection between the banking crisis in Iceland which saw that nation’s banking system exposed globally to the tune of ten times GDP and “US greed and lack of regulation”?

And could you please explain the connection between Iceland’s total failure to reinvest in its historically economically advantageous industry, fishing, and “US greed and lack of regulation”?

Could you also please explain the collapse in the Anglo Irish Bank and its CEO’s hubristic use of bank assets and “US greed and lack of regulation”?

Could you also please explain why it is that you think “US greed and lack of regulation” caused a global economic crisis and yet my own nation was virtually untouched by it, as were other nations unaffected to varying degrees?

Now, just one last question, if it isn’t too much trouble - Your insistence that “US greed and lack of regulation” as the cause of the “global” financial meltdown: it seems very much at odds with one Professor Steve Horwitz, who is the Charles A Dana Professor and Chair of Economics at St. Lawrence University. He is of the opinion that “lack of regulation” was not a cause of the economic crisis. In fact he states the reverse. You can read all about it in his An Open Letter To All My Freinds Of The Left. All his friends “of the left” seem to think as you do.

Are you right and Horwitz wrong?

 

[Abu]

essie7777 #340
you seem to be arguing that if a person is forced into poverty then they should feel they are better off because they at least have a job… Whilst your argument allows for people to work for “unjust” wages, throwing them into poverty and desperation, you seem to advocate this is all good because the business survives.

Strange and false, as “poverty” is not assumed and many choices are available. Why should forced “poverty” be blithely presumed? Why should freedom of choice be denied? In the real world the Church affirms free enterprise.

We have seen the impossibility of defining a just wage as doctrine as shown by Fr Harrison (post #316), while flexibility in “just” wages in commerce is specifically recognised by Pius XI in *Quadragesimo Anno *72: “In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers.” Thus practical real-world restrictions are recognised and allowed for. But what makes a demand “unjust”?

While the market realities of free enterprise are explicitly recognised by Pius XI, yet the question of a reduction in business, apart from closure, is not even considered here!

Again Pius XI also recognises the harm that can be done in a dictate to higher wages:
74. “But another point, scarcely less important, and especially vital in our times, must not be overlooked: namely, that the opportunity to work be provided to those who are able and willing to work. This opportunity depends largely on the wage and salary rate, which can help as long as it is kept within proper limits, but which on the other hand can be an obstacle if it exceeds these limits. For everyone knows that an excessive lowering of wages, or their increase beyond due measure, causes unemployment. This evil, indeed, especially as we see it prolonged and injuring so many during the years of Our Pontificate, has plunged workers into misery and temptations, ruined the prosperity of nations, and put in jeopardy the public order, peace, and tranquillity of the whole world. Hence it is contrary to social justice when, for the sake of personal gain and without regard for the common good, wages and salaries are excessively lowered or raised; and this same social justice demands that wages and salaries be so managed, through agreement of plans and wills, in so far as can be done, as to offer to the greatest possible number the opportunity of getting work and obtaining suitable means of livelihood.”

The references in Bl JP II’s Centesimus Annus to wages are from Rerum Novarum. In CA #34, the Pontiff writes: “In Third World contexts, certain objectives stated by Rerum Novarum remain valid, and, in some cases, still constitute a goal yet to be reached, if man’s work and his very being are not to be reduced to the level of a mere commodity. These objectives include a sufficient wage for the support of the family, social insurance for old age and unemployment, and adequate protection for the conditions of employment.”

Further, Bl JP II, in quoting Pius XI on “just” wages, acknowledges that “Another task of the State is that of overseeing and directing the exercise of human rights in the economic sector. However, primary responsibility in this area belongs not to the State but to individuals and to the various groups and associations which make up society.…the State has a duty to sustain business activities by creating conditions which will ensure job opportunities, by stimulating those activities where they are lacking or by supporting them in moments of crisis.” (CA 48).

Fr Sadowsky is incisive in facing reality.

anthonyflood.com/sadowskycatholicsocialdoctrine.htm
From This World, Fall 1983, pp. 115-125
Capitalism, Ethics, and Classical Catholic Social Doctrine
James A. Sadowsky, S.J.
“Few see that it is the consumer who puts the cap on wages. In this respect, the employer is a middleman. By buying elsewhere or by not buying at all the consumer vetoes the choice of the over-generous or extravagant employer. Unless the government forces the consumer to buy the good at the higher price, there is no way that employers can increase these wages and still remain in business.”

 

[essie7777]

You amaze me, …

I have shortened your quote as the first four points deal with same question … repetition doesn’t make you right. Your question was answered numerous comments ago … you yet again cherry picked what i commented as i was so helpful and included Abu’s response to said answer just to highlight that you were the only one seemingly incapable of finding it.

It seems that Abu’s seemingly innocuous comment about a connection between the welfare state and Europe’s economic meltdown is, in your most learned opinion, ludicrous

Abu has gone to great lengths to explain how the welfare state is the root cause of the problems in Europe --that is ludicrous in itself … there are a myriad of reasons for the issues in Europe most significantly the financial meltdown of 2007-2008.

additionally, i’m not quite sure how the question "are you truly suggesting this is the sole reason for the crisis in Europe currently is “illogical, rude or off topic”.

Now, just one last question, if it isn’t too much trouble - Your insistence that “US greed and lack of regulation” as the cause of the “global” financial meltdown: …Are you right and Horwitz wrong?

Just out of curiosity how many academic or professional expert links would you like to have me refute your one commentor? I’m pretty sure i am not only the only person with this opinion either.

Your quick defense of the US not being responsible for the crisis is admirable but not founded on FACT. Please allow me to give you a brief recap of the cause of the 2007-8 crisis which has precipitated and had consequences still being felt today:

Whether you want to accept the fact or not the crisis was started and caused in the US. This though doesn’t abstain non Us companies from their share of the blame as to how this managed to ripple elsewhere and be so disastrous globally.

2001 - The US had a mild short lived recession ( think dotcom, accounting scandals etc), the Fed Reserve lowered the Federal Funds rate 11 times until it bottomed in at 1.75% in Dec 2001.

This created liquidity. Basically cheap money. Borrowers were able to access this in a period perceived as boom, where loans, especially mortgage loans were offered to people who should not have been offered such financial products.

This caused a rush on the “sub-prime” lending products, a huge increase in house prices.

Simultaneously the Fed continued decreasing interest rates until be June 2003 they hit 1%. This was the lowest rate for 45 years.

The US banking regulations were not sufficient enough to prevent sub prime assets from being repackaged into collateralized debt obligations(CDOs). This created a secondary market of originating and distributed subprime loans. the way regulation worked at the time in some cases the trail back to the original sub-prime loans was so distorted it became impossible for investors to even know where they originated.

Oct 2004 -the SEC lowered net capital requirement for five of the biggest banks in the US. Consequence they could leverage their subprime assets up to 40 times their original value.

By this point the assets were moving global with the advanced secondary market as the property market was still high, returns on the CDO were as such swift --so no one questioned what they were based on.

Unfortunately by mid 2004 the Fed increased interest rates steadily until June 2006 they stayed at 5.25% till 2007 (THE CRASH). Compunding this was the inevitable cap of home buyers in the US the market costs were not balanced by new purchases and current borrowers began defaulting in huge numbers on their mortgages and these borrowers were forcing the original sub prime lenders into collapse.

In Feb and March 2007 – 25 sub prime mortgage companies filed bankruptcy.

As explained above the assets had been repackaged and begun to be sold as securities in a myriad of formats both internally in the US and abroad. By August 2007 the US system was incapable of stopping the crisis from going global.

The interbank market froze, countries central banks all had to take action to try and prevent the US sub prime crisis from toppling the economies in their counties and with their largest firms, much the same as seen here in the US.

In October 2008 the Fed and foreign central banks attempted a coordinated approach to prevent full economic meltdown … it failed and financial meltdown occurred anyway.

The cost of this crisis varies from country to country and how you look at; the amount written down by the banks or the amount put in by Governments? Write downs in the G20 countries were $1175 BILLION.

I think i have covered all of your potential points; i’m sure though you’ll find some points to use to critize not just my opinion but the majority of people worldwide. Please though before you start proclaiming i’ve got it wrong check that you have FACTUAL data to use rather than simply patriotic fervor for the US being blameless.

I’ll post answers to your other questions shortly as i am pretty sure you will have losts to tell me on how i am wrong on this one question alone.

 

[essie7777]

But what makes a demand “unjust”?

Surely you can agree that would be not being able to survive with shelter, food and medical care when needed.?

Again Pius XI :74. "Hence it is contrary to social justice when, for the sake of personal gain and without regard for the common good, wages and salaries are excessively lowered or raised; and this same social justice demands that wages and salaries be so managed, through agreement of plans and wills, in so far as can be done, as to offer to the greatest possible number the opportunity of getting work and obtaining suitable means of livelihood.”

I have noticed that you continue to rely on the same few quotes from Papal documents that don’t explicitedly champion your interpretation. As above though they do point out how excessive abuse one way or the other can cause harm.

I still haven’t been given any justification that you can in anyway use examples as above to claim the Church does not advocate minimum wages, rights, protection for the employees of businesses.

All you do is put forward the “evidence” that clearly shows the Church teachings of everyone’s right to be able to live a minimum standard of life, with access to all rights as needed to protect them.

Unless the government forces the consumer to buy the good at the higher price, there is no way that employers can increase these wages and still remain in business.”

This does seem at odds with your stance that Government should not be used to protect the rights of people through a financial support system (welfare state).

Are you suggesting Government should be responsible for making businesses competitive so that they can increase profits, and thus wages. Where now is your argument that it is not the state but individuals who are responsible for themselves, or does this not extend to business owners making themselves competitive in a “free economy”?

…
i do have one question; if we agree to disagree on the interpretation of Papal documents and direct Church evidence for the moment - i have noticed that all of your additional quotes are from works in the 1980s and 1990’s … Do you not have anything more recent that discusses this interpretation of Church teaching? I’ve looked at can’t find anything to read on it … although i don’t truly understand your point of view so this may be hindering the search.

 

[essie7777]

Can you please explain the connection between the implementation of the extremely generous Greek welfare payments and the ensuing crisis and “US greed and lack of regulation”?

US situation dealt with in previous post. The roots of the Greek crisis lie in its ascension to the EU and the costs associated with meeting the criteria of being able to become a member – the debts they took years ago were all due payable in 2010 … the impact of the financial meltdown (causes above) were as a consequence of their investment strategy to securities and their leverage issues with the assets they held. The crisis of 2007-2008 meant their debts were more expensive than they were when taken and increased government spending as seem by most countries to try and forestall full blown market crash didn’t help matters.

The welfare state in Greece is new --introduced only in the 1980s. It was not even properly funded until the late 1990s as a condition for entry into the EU. the cost of welfare - social services and universal health is estimated to be around 15billion(Euros) for 2012. Hardly a crippling amount in the large picture of estimated budget spending of 90 billion(Euros 2012). So how then can you reasonably claim that the welfare state is the cause of Greece’s financial disaster.

Could you also please explain the connection between the banking crisis in Iceland which saw that nation’s banking system exposed globally to the tune of ten times GDP and “US greed and lack of regulation”?

As stated in previous post i am sure you have read what started the global crisis in 2007/2008. The Icelandic crisis was started in 2008. Predominately because of its exposure to bank debt globally. As stated above the CDO and other securities used by US business to sell their sub prime assets were leveraged up to 40 times their true value. So when the US market fell, the secondary market fell and the markets invested in them, such as Iceland were left with valueless investments.

Your very sensational 11 times GDP comment is actually incorrect – the assets of the three largest banks in Iceland were 11 times the countries GDP, its exposure though though to the tainted assets from the sub prime market were 5 times the Icelandic GDP - enough to default on foreign debt and since the government didn’t guarantee external debt of the banking system they went bankrupt.

I am sure though you are not comparing a banking collapse in Iceland with a global financial meltdown, though connected they are not exactly comparable.

Could you also please explain the collapse in the Anglo Irish Bank and its CEO’s hubristic use of bank assets and “US greed and lack of regulation”?

As stated in previous post the use of the interbank market by non US based institutions to access the highly attractive repackaged CDOs of the sub-prime market i have explained … i won’t repeat here. Anglo-Irish took full advantage of this especially from 2005 onwards.

The exposure of the bank to the market was heightened because of its underwriting relationships with AIB, Merrill Lynch and others. Basically ensuring they were not only exposed to their own market but the US market as well.

The fact that corrupt members of the board and its CEO hid these tainted assets off the balance sheet does not separate the fact that the assets could be traced, in part, back to the sub prime crisis in the US. The Anglo-Irish also duplicated the errors seen in the US market itself and managed to prevent discovery of its true exposure until end of first quarter 2008 - this was the “hubristic” behavior of the then CEO.

Could you also please explain why it is that you think “US greed and lack of regulation” caused a global economic crisis and yet my own nation was virtually untouched by it, as were other nations unaffected to varying degrees?

Which nations are you referring to?
…

I have absolutely no doubt you will find numerous inaccuracies and reasons to claim my knowledge is tainted, or not based on intellect or experience. Respectfully you have no idea what you are talking about in reference to myself, my knowledge or my experience. i believe i have answered all your questions appropriately. there are numerous sources that will confirm my FACTS. so i eagerly await your usual rampage that i know nothing!

 

[David_Castlen]

I think you may be confused about my the statement you quote --allow me to explain;

Abu provides a lot of quotes that support Catholic social teaching ( it his insistence that he interprets these small quotes differently to the whole works premise that is frustrating, especially when he suggests he understands and can conclude what Pope’s wrote better than they themselves); no where does he provide consistent data on complex economic structures.

I beg to differ; apparently you are looking through a very prejudice eye or you are late in reading this interchange. He consistantly will make a point and then provide supporting data (typically a book) and some data.

Abu likes to tey and “blind people with science” as the phrase goes; through enough quotes and official sounding words together and a reader won’t actually question that they don’t support his point of view. It’s the small unquoted conclusions that demonstrate the inability to cohesively support his thinly veiled political agenda.

God bless you Essie, but this is exaclty what you have done

For example as a Catholic do you honestly believe from Abu’s postings that the Church no longer supports minimum wages because it causes unemployment???

**Here is the problem you are having Essie. The church explicitly pronounces that employees should recieve a fair or just or “enough” of a wage. You take this pronouncement to the next step that the church DOES not; you say, if the church says that something must exist then the government must implement it. The church does not say the the government should implement a “fair wage” program. That is for the owner of the company to do. And Abu has done a yoeman’s (spelliing) job of clarifieng this. I should not be resonding to this; he can do a much better job. But again, if the church says things must be this way - it does not say that the government should implement it.

To go to the next step. The church recognizes (as Abu has pointed out) that when government gets in the social business - 1. people suffer greatly, 2. society becomes less moral and 3. the harm this created becomes more and more difficult to overcome.

And finally Abu has pointed out that the church condemns socialism pointing out that it creates envy, reduces ones dignity and does nothing to provide for the poor. Abu clearly has given examples, data and excellent reading material from Church leaders historically and currently.

**

I sincerely pray you are not that blinded by rhetoric to see that this is not right nor factual.

**I clearly understand that taking from others is a sin
I clearly understand that intruding on ones life activities is a sin
I clearly understand that killing is a sin

The heart of capitalism, free market, what ever you may call it is based on:
No one has a right to another’s life
No one has a right to another’s activities (unless it violates other rights)
No one has a right to another’s property

Read the great Frederic Bastiat’s The Law** 1848 - a wonderful Catholic
And contrary to to some thought the Late Scholastic were proponants of freedom.

At the heart of this debate are two very simple issues: Do you believe in freedom? Or are you a tyrant? It is just as simple as that.

---

By all means share a political point of view but please don’t try to force Catholic teachings to justify it, that’s inappropriate.

**There is no force suggested from Abu, like the force that would be confronted with in a system that forces a wage program on a company: a sin - a most grevious sin that has caused so much poverty.

What is not political if government policy intrudes on “it”. How can economics (that the government should have nothing to do with) not be a political if the government has imposed itself on - it is not possible. That is like saying, " do not talk about reliogen while we are discussing sin" What!? And you are just as if not more political while you condemn him for being so. By the way, he has never espoused a party affiliation or support (politica) he has espoused an economic system. And since government has imposed a economic system on us it stands that we are a subset of that topic. If supporting an economic system is political, what have you done? **

 

[David_Castlen]

Please feel free to read what i wrote AGAIN … maybe this time with an open mind rather than simply trying to defame what i am saying.

I do find it interesting to note that your contributions are solely to defend Abu usually by attempting to discredit, defame and i will admit “politely” insult those who disagree with him.

Do you not have anything of value to add yourself?

I am tall and won second place in my 8th grade class spelling bee

 

[Savior2012]

Please. The purpose of profit is not limited to bare survival. Presenting that as basic economy or me as not very bright will not cut it.

The purpose of business is to make a profit, how else do you pay the utility bills, employees and incur wealth…

The purpose of business is not to support free loaders with their hands out.

 

[essie7777]

I beg to differ; apparently you are looking through a very prejudice eye or you are late in reading this interchange. He consistantly will make a point and then provide supporting data (typically a book) and some data

.

Actually he tends to use evidence that support accepted Catholic Teaching in his quotes — its the conclusions he draws i and others here completely disagree with (as immediately below). He takes the meaning and total emphasis of a document and forces it to fit political viewpoint.

For example as a Catholic do you honestly believe from Abu’s postings that the Church no longer supports minimum wages because it causes unemployment???

The church explicitly pronounces that employees should recieve a fair or just or “enough” of a wage…taken the rest of the quote out as its soo long

This response is completely off point … please read the question in full – which asked:

do you honestly believe from Abu’s postings that the Church no longer supports minimum wages because it causes unemployment???

Your “wonderful” defense of Abu’s position does not answer the question nor even attempt to. The distraction doesn’t make it disappear either.

There is no force suggested from Abu, like the force that would be confronted with in a system that forces a wage program on a company: a sin - a most grevious sin that has caused so much poverty.

There is really nothing i need to say here – your own words demonstrate your “politics” – business over people! you are pushing an extreme political view and trying to get Catholic teachings fit it.

How can economics (that the government should have nothing to do with) not be a political if the government has imposed itself on - it is not possible

.

As above – your belief that the economy should have noting to do with the economy demonstrates your very extreme political view point. The Church doesn’t share your belief that the State has no role in the economy…

 

[essie7777]

Please feel free to read what i wrote AGAIN … maybe this time with an open mind rather than simply trying to defame what i am saying.

I do find it interesting to note that your contributions are solely to defend Abu usually by attempting to discredit, defame and i will admit “politely” insult those who disagree with him.

Do you not have anything of value to add yourself?

I am tall and won second place in my 8th grade class spelling bee

LOL – a wonderful achievement i’m sure if i knew what a spelling bee was!

 

[John21652]

I have shortened your quote as the first four points deal with same question … repetition doesn’t make you right.

Repetition doesn’t make me wrong either!

Your question was answered numerous comments ago … you yet again cherry picked what i commented as i was so helpful and included Abu’s response to said answer just to highlight that you were the only one seemingly incapable of finding it.

That’s the rub - you didn’t answer my question.

Abu has gone to great lengths to explain how the welfare state is the root cause of the problems in Europe --that is ludicrous in itself … there are a myriad of reasons for the issues in Europe most significantly the financial meltdown of 2007-2008.

Here you contradict yourself. You state that Abu’s thesis is ludicrous, yet when you admit that there are a myriad of reasons for the financial meltdown, you have to admit that the welfare state has played a role and if that is the case, then his thesis is not ludicrous. In fact, it has great merit. Stating that there are a myriad of causes does not refute his thesis that the welfare state “helped”.

additionally, i’m not quite sure how the question "are you truly suggesting this is the sole reason for the crisis in Europe currently is “illogical, rude or off topic”.

In post #303 Abu wrote the following -

As the Welfare State has helped Europe to its present meltdown, many Governments have slashed its idiocies – Sweden is an example of what has happened.

You then took the phrase "As the Welfare State has helped Europe to its present meltdown" and used it in an attempt at refuting the notion that the welfare state played a major role in the European financial crises. In fact, it was you who distorted Abu’s phrase by suggesting that he wrote that the welfare state was the “root cause”, when all he wrote was that it “helped Europe to its present meltdown”.What he wrote about Sweden is true and it is also true of Greece, Iceland and Ireland. Thus your question was illogical, rude and off topic because you mislead everyoone by rewriting what Abu initially wrote.

Just out of curiosity how many academic or professional expert links would you like to have me refute your one commentor? I’m pretty sure i am not only the only person with this opinion either.

Again, you have both avoided and evaded the question. Let me refresh your memory. I posted the following -

Now, just one last question, if it isn’t too much trouble - Your insistence that “US greed and lack of regulation” as the cause of the “global” financial meltdown: it seems very much at odds with one Professor Steve Horwitz, who is the Charles A Dana Professor and Chair of Economics at St. Lawrence University. He is of the opinion that “lack of regulation” was not a cause of the economic crisis. In fact he states the reverse. You can read all about it in his An Open Letter To All My Friends of the Left. All his friends “of the left” seem to think as you do.

Are you right and Horwitz wrong?

And your response was "how many academic or professional expert links would you like to have me refute your one commentator?"!! The “commentator” you refer to just happens to be a very distinguished economist. His opinions are at variance with yours. The question I asked was a very simple one and you couldn’t even give a simple answer. Instead, you gave a simplistic one.This was your big chance to display the macro-economic prowess you would have us believe you possess and you shirked the issue.

Your quick defense of the US not being responsible for the crisis is admirable but not founded on FACT.

And how, pray tell, can asking a series of questions about what you termed “US greed and lack of regulation” be construed as being in “…defense of the US…”? In short, it can’t.

Please allow me to give you a brief recap of the cause of the 2007-8 crisis which has precipitated and had consequences still being felt today:

And here you went off on a long a rambling account of what took place in the U.S.

This is where you should have dealt with Professor Steve Horwitz’s An Open Letter To My Friends on the Left, because it deals in great depth what you wasted an entire post glossing over. However, you avoided it. Quite a pattern here, don’t you think?

The cost of this crisis varies from country to country and how you look at; the amount written down by the banks or the amount put in by Governments? Write downs in the G20 countries were $1175 BILLION.

Why focus on the G20 countries, when the crisis was supposedly global? The fact that the crisis varied in severity from country to country should also be a great clue to you too. Surely, you have enough nouse to ask yourself why it was the case that some countries were not harmed by the financial meltdown as much as other countries? Can you find a reason for that?

… check that you have FACTUAL data to use rather than simply patriotic fervor for the US being blameless.

Another misconstruction. Please find where I have written that the U.S. is “blameless”. If you can’t, then feel free to say “I’m sorry John”.

 

[Abu]

essie7777 #345
if we agree to disagree on the interpretation of Papal documents and direct Church evidence for the moment - i have noticed that all of your additional quotes are from works in the 1980s and 1990’s … Do you not have anything more recent that discusses this interpretation of Church teaching?

Since the purpose here is ultimately to offer and discover truth, whether anyone disagrees with what the Church teaches, and the level of that teaching, is their onus and on their conscience.

Quotations are given as required –
Post #55:
Pope Benedict XVI felt it necessary to teach that “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…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas et Veritate, Benedict XVI, 2009, #36).

Post #61:
Free enterprise economic development started in the great Catholic monastic estates of the ninth century, and a solid basis of economic Catholic thought developed from the fourteenth century. In the fifteenth century the Late Scholastics who were Thomists (followers of St Thomas) “writing and teaching at the University of Salamanca in Spain, sought to explain the full range of human action and social; organization.” They “observed the existence of economic law, inexorable forces of cause and effect that operate very much as other natural laws. Over the course of several generations, they discovered and explained the laws of supply and demand, the cause of inflation, the operation of foreign exchange rates, and the subjective nature of economic value…” For these reasons Joseph Schumpeter applauded them as the first real economists. (Thomas E Woods Jr, The Church And The Market, Lexington Books, 2005, p 8).

Post #67:
“We can this affirm unambiguously that Jesus Christ ‘looks with love on upon human work’ and that the work of the merchant – the businessman or the entrepreneur – is one of the ‘different forms’ of work that is affirmed. The parable of the talents makes this clear by its reference to money, trading, risk taking and banking.”
Entrepreneurship in the Catholic Tradition, Fr Anthony G Percy, Lexington Books, 2010, p 48-49].

Post #86:
The Catholic stress on individualism was foreign to many cultures, and Jeremy Waldron, in God, Locke and Equality, 2002, affirms that Locke built his thesis on the doctrine concerning morality; “returning to the standpoint of St Thomas and the Scholastics.” (The Catholic Church And the Counter-Faith, Philip Trower, Family Publications, 2006, p 74).

How John Locke Influenced Catholic Social Teaching , Joe Hargrave, Nov 5, 2010.
“In Locke’s and Leo’s treatment of charity, however, it is also made clear that the right to private property coexists with an obligation to give charitably, and even a right to theft in cases of extreme want. In the short term, this may justify some sort of safety net for the unemployed and those unable to care for themselves. But may we not ask whether or not a free economy would generate a level of wealth and prosperity that would almost entirely eliminate the sort of extreme poverty that would morally justify theft – and whether it has in fact done so in many nations already?

“If market economies based upon the protection of private property and driven by competition and technological innovation tend to reduce the cost of goods and services over time, then surely none will benefit more than the poor.”
crisismagazine.com/2010/how-john-locke-influenced-catholic-social-teaching

Post #88:
On *Caritas in Veritate *Fr John De Celles points out that the Pope clearly states that “The Church does not have technical solutions to offer” [CV 9]. Also, not only does the encyclical not even once use the world ‘capitalism’, but it does refer repeatedly to the ‘market economy,’ a term of art which Pope John Paul II used to refer to that form of capitalism that is ‘the path to true economic and civil progress.’ See Centesimus Annus, 42. And rather than attacking capitalism Benedict generally embraces it, while calling for its renewal, as it were, in charity and moral truth. It is this renewal that will make the old order ‘new.’

Fr De Celles: “….the Pope writes specifically of the need for the “redistribution of wealth,” which many say is anathema to capitalism. Unfortunately, his use of the term is often ambiguous, but in no way suggests a massive effort by government to take from the rich, by taxes or other means, to give to the poor. In fact, he seems to argue against that kind of radical redistribution when he later proposes the need for an “effective antidote against any form of all-encompassing welfare state” [CV 57]. The only time he is clear on what he means by “wealth redistribution” is when he uses it to mean increasing the share of wealth of the poor by normal market economic activity such as, better jobs, increased profits, etc. [CV 42]. No capitalist I know would object to that, or even to the normal redistribution of wealth that comes through reasonable taxation…… This seems consistent with what he said just six months prior to releasing CV: ‘the illusion that a policy of mere redistribution of existing wealth can definitively resolve the problem must be set aside. …Wealth creation therefore becomes an inescapable duty… if the fight against material poverty is to be effective in the long term.’ Message of the World Day of Peace, January 1, 2009.”
catholicculture.org/culture/library/view.cfm?recnum=9102

 

[Abu]

essie7777 #345
To my #343:
You Quote Abu:
*But what makes a demand “unjust”? *
Your answer:
Surely you can agree that would be not being able to survive with shelter, food and medical care when needed.?

The Pope’s answer is “it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers.” Yet the Encyclical does not attempt to consider a reduction in business, apart from closure.
Thus an unjust demand could be one that is incompatible with the welfare of a business, and therefore all its participants, after all means are taken to keep the business competitive.

You Quote Abu:
Unless the government forces the consumer to buy the good at the higher price, there is no way that employers can increase these wages and still remain in business.”
Your answer: This does seem at odds with your stance that Government should not be used to protect the rights of people through a financial support system (welfare state).

The economic fact given by Fr Sadowsky, S.J., has nothing to do with welfare of any kind but with consumer choice which can close a business if prices are increased to pay wages above the market and thus add to prices: “Few see that it is the consumer who puts the cap on wages. In this respect, the employer is a middleman. By buying elsewhere or by not buying at all.”

Are you suggesting Government should be responsible for making businesses competitive so that they can increase profits, and thus wages.

No.

Where now is your argument that it is not the state but individuals who are responsible for themselves, or does this not extend to business owners making themselves competitive in a “free economy”?

That’s the purpose of any business, for success – to compete successfully in an open market.

The inability to appreciate the Church’s teaching, a business economy and the confusion here evinced, are simply incredible.

 

[essie7777]

Repetition doesn’t make me wrong either!

That’s the rub - you didn’t answer my question.

The question was answered you have s(name removed by moderator)ly chosen to ignore it.

Stating that there are a myriad of causes does not refute his thesis that the welfare state “helped”.

Never stated it helped or didn’t simply find it bizarre that you any comment on the financial crisis that boils it down to the welfare state is fundamentally incorrect.

What he wrote about Sweden is true and it is also true of Greece, Iceland and Ireland.

Sorry but again you show a huge misunderstanding of what is happening and has happened in these countries.

You posed the question who is right myself or the author you cited … interesting but your one quote expressed one minority opinion not backed by the events and FACTS which created the financial meltdown.

And here you went off on a long a rambling account of what took place in the U.S.

So how was my answering your question, evading it – you simply don’t like the answer.

This is where you should have dealt with Professor Steve Horwitz’s An Open Letter To My Friends on the Left, because it deals in great depth what you wasted an entire post glossing over. However, you avoided it. Quite a pattern here, don’t you think?

Answered it by explaining in very simple terms for you what caused the global financial meltdown - Us lack of regulation and greed. Again if you refute it please do that rather than ignoring the FACTS and trying to confuse the issue by suggesting i didn’t answer this - i laid it out completely for you and you are trying to ignore this by stating that the account given was rambling … No it is FACT.

The “commentator” you refer to just happens to be a very distinguished economist.

Actually the commentator isn’t a renowned economist he is a sitting professor whose main line of work is liberal economics and their impact on family. Hence the question how many references would you prefer to see to dispute his statements from people who actually are experts in the field.

His opinions are at variance with yours. The question I asked was a very simple one and you couldn’t even give a simple answer. Instead, you gave a simplistic one.

absolutely we don’t agree -and only someone determined not to acknowledge these difference would discount my answer given to you on why i and thousands of others believe the US created the financial meltdown as simplistic. If you believe this you truly don;t seem to understand what happen in 2007-08.

And how, pray tell, can asking a series of questions about what you termed “US greed and lack of regulation” be construed as being in “…defense of the US…”? In short, it can’t.

Your questions stated your belief that this was incorrect and your tone was sarcastic, please at least have confidence to admit your bias.

Why focus on the G20 countries, when the crisis was supposedly global?

I used the G20 to illustrate a point … i did ask what other nations, including your own were unaffected by the crisis … you failed to answer. i wonder why?

The fact that the crisis varied in severity from country to country should also be a great clue to you too. Surely, you have enough nouse to ask yourself why it was the case that some countries were not harmed by the financial meltdown as much as other countries? Can you find a reason for that?

Shocking isn’t it that to answer your question you’d need to understand how the crisis happened and what its consequences were:

It’s really very simple.

The severity of impact depending initially on exposure to what became known as the toxic assets of the sub prime mortgage debacle. What followed when companies then found themselves too highly leveraged they were forced to bankruptcy and then the issue became exposure to the companies affected by this --the resulting globalization of the crisis highlighted the myriad of relationships between different countries, their governments as well as their companies, the tendency to be cross invested through funds, securities and other investment vehicles so as companies fell or drew down on assets this impact other countries and companies.

The difference in how this impacted countries therefore depended on their exposure on two levels. the root cause despite your rhetoric is the US and its system’s flaws in regulation and the incessant drive of greed.

Another misconstruction. Please find where I have written that the U.S. is “blameless”. If you can’t, then feel free to say “I’m sorry John”.

You have consistently argued that the cause being the US lack of regulation and greed as wrong – if you don’t like that being paraphrased as you stating they are blameless please make yourself clear on your point of view and/or provide a word you are more comfortable with.

…
I have noticed though that you still continue to state i have not answered your questions when in fact i have. You simply don’t like the answers but rather than deal with them face on you are determined to try and discredit my opinion as baseless by at attacking my knowledge and understanding.

I have yet to see you actually answer with anything more than a personal attack (usually shrouded in sarcasm); is it simply that you don’t have anything to refute my comments with? if its not US lack of regulation and greed which created the financial meltdown feel free to offer another perspective – please try and keep to facts as i did rather than sweeping comments based on your personal interpretation and hope.

 

[John21652]

US situation dealt with in previous post.

The roots of the Greek crisis lie in its ascension to the EU and the costs associated with meeting the criteria of being able to become a member –

The roots of the Greek debt crisis lie in its having toyed with socialism ever since the collapse of the Military Junta in 1974. Financial corruption was apparent even under the military. The socialists took power in 1980 and that’s when Greece started down the road of turning itself into a welfare state.

The welfare state in Greece is new --introduced only in the 1980s.

Thirty years of welfareism is not “new”. Greece was already well into deficit spending by the time it came to join the E.U.

So how then can you reasonably claim that the welfare state is the cause of Greece’s financial disaster.

World renowned Greek academic Arastides Hatzis is an advisor to the South Korean government. He is on record as saying that the bankruptcy in Greece is attributable to two giant political parties that competitively engaged in welfare populism. Yes. Greece borrowed from the likes of Goldman Sachs to hide their debt and to fiddle the books to gain entry into the enlarged E.U. That entry gave greece major fiscal and monetary benefits. Subsidies and loans for development immediately became available. Interest rates fell and Greece’s profligacy went unchecked. Unfunded pensions, rediculously early retirement schemes and generous pensions to ex-public servants were all symtomatic of greece’s profligate spending and corruption.

Read about it right here - Wall Street Helped To Mask Debt Fuelling Europe’s Crisis.

More here.

You can’t “mask” what isn’t already there.

Oh yeah, before I forget, research Greece’s spending on the Olympics and pale at the rorting and cost overuns. Sheeesh.

As stated in previous post i am sure you have read what started the global crisis in 2007/2008. The Icelandic crisis was started in 2008. Predominately because of its exposure to bank debt globally. As stated above the CDO and other securities used by US business to sell their sub prime assets were leveraged up to 40 times their true value. So when the US market fell, the secondary market fell and the markets invested in them, such as Iceland were left with valueless investments.

It actually started earlier. In the 1990s. This is when when Iceland freed up its economy. I mentioned the Icelandic fishing industry, but you bypassed this point. A feature of the Icelandic free market exculded the fishing industry, much to its detriment later. Do you know what it was? Meanwhile, everyone got into the act, even fishing boat captains and the amount of credit bought by the Icelanders was legendary. Most of that credit came from the U.K. not the U.S.

Your very sensational 11 times GDP comment is actually incorrect

–I actually wrote 10%

the assets of the three largest banks in Iceland were 11 times the countries GDP, its exposure though though to the tainted assets from the sub prime market were 5 times the Icelandic GDP

-Iceland built its expansion on the world wide credit boom and invested heavily in European businesses. It did not expose itself directly to the sub-prime market.

I am sure though you are not comparing a banking collapse in Iceland with a global financial meltdown, though connected they are not exactly comparable.

Oh come on. The global financial collapse caught Iceland as exposed as Greece and Ireland. Iceland did not institute a welfare state. However, what had been the mainstay of their economy was deeply affected by not having been denied a free market operation in the first place and this little fact almost finished off their mainstay industry.

As stated in previous post the use of the interbank market by non US based institutions to access the highly attractive repackaged CDOs of the sub-prime market i have explained … i won’t repeat here. Anglo-Irish took full advantage of this especially from 2005 onwards.

The availability of cheap cash doesn’t explain the behaviour of the borrowers.

Which nations are you referring to?

I mentioned my own. I could throw in China, Thailand, plus a few others. They all had a few things in common, just as did those who suffered the most. Those who suffered the most were exposed to the financial crash and indebtedness was crucial. High government spending as a percentage of GDP, usually with deficit budgets, caused the greatest exposure. The most profligate governemnts, like Greece, had a large welfare aspect to their spending. Just like Abu pointed out to you. And he was also right in pointing out that Sweden has learnt a hard lesson and is winding back its famous welfare state dramatically.
Read all about it right here.
…

so i eagerly await your usual rampage that i know nothing!

Now, did I ever say that?

In fact, I even assumed you had great macro-economic knowledge.

 

[Abu]

essie7777 #355
if its not US lack of regulation and greed which created the financial meltdown feel free to offer another perspective

Wow – “lack of regulation”? How naïve. There has been finagling by the U.S. government and the Fed for yonks.

If there is a problem with how the market operates the first place to look is the government – that’s why there was no prolonged meltdown in the 1920’s in the U.S.A.

The economies of the West, led by the U.S.A., are widely considered to be “market” economies, but they are not the free enterprise economies arising from the Late Scholastics because these Western markets are deluged and deluded by interventionism.

The start was in 1929, and when FDR took office in March 1933 he consolidated it by even worse policies – he institutionalized the Great Depression.

It is Welfare Statism which has contributed to the European debacle, and deficit spending, which over decades have contributed also to the meltdown in the U.S.A.

The fact is that free enterprise has been plagued by intervention in the market, rather than the market economy itself. This was the driving factor behind the meltdown from 2008. Central Banking and a federal reserve bank are not creations of free enterprise and their destructive behaviour is not the market’s fault! Every previous boom and bust can be shown to be the result of intervention using theories that distort free enterprise.

This is Bernanke’s record:
May 2007: as the housing collapse hit the economy – “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.” [Bloomberg TV May 17, 2007].

By mid-March 2008, Bear Stearns was collapsing and the Fed chose to bail it out, by buying Bear Stearns and handing it to JP Morgan. In August 2008, Paulson and Bernanke claimed that apart from a possible bailout of Fannie and Freddie, the economic fundamentals were sound. [Associated Press, “Paulson Backs Bush Comment About Wall Street’s ‘Hangover,’ ” August 10, 2008].

What a record!