Why is socialism bad by Church teaching?

[markbrumbaugh]

Cricket…still waiting on your answer concerning subsidiarity. Been a while since you started preparing it. Did you run into a snag?

 

[Cricket123]

Again I ask, Do you expect honesty about the fed and government from an economist for the fed?

Heh, heh. I though you might ask me that after I posted. Fair enough. No, I don’t. On the other hand, I do find more credibility in a statistical analysis that has 7 tables of the statistics in question appended. These could be questioned too, but still…

Obviously, we’ve digressed considerably from my original point. My intention was never to defend socialism as such, or “big government,” and certainly not every federal policy. I think housing came up because one of Abu’s links led me to an article on housing. The housing crisis is not an area of particular expertise for me. However, statistical analysis is. Just for fun, and without arguing either side of the issue, let me parse some of the article you quoted:

**"To begin with, the CRA defenders’ claim that CRA lending mostly wasn’t subprime is highly misleading. It would be more accurate to say that 90 percent of CRA lending wasn’t classified as subprime. **

OK, he wants to change the definition of “subprime.” Why? Also, CRA lending covers much more than home mortgages.

**CRA lenders, along with Fannie Mae and Freddie Mac—the two government-sponsored entities that bought loans from lenders, enabling them to make more loans—commonly classified CRA loans as “subprime” only if they contained such features as high fees, high rates, or low initial payments with adjustable interest rates. **

But most lenders also classified non-CRA loans as subprime this way. He also here subtly implies that Fannie and Freddie were the only entities buying loans from lenders.

But approximately 50 percent of CRA loans for single-family residences were nevertheless made to borrowers who made down payments of 5 percent or less or had low credit scores—characteristics that indicated high credit risk. Whether or not anyone called these loans “subprime,” in other words, the chances are good that many of them have defaulted or remain at high risk of doing so.

“The chances are good…” In other words, even I realize I have not supported my assertion, but I hope you won’t notice.

**Though the feds, again, haven’t collected figures for CRA loans’ performance as a whole, we do have statistics from a few lenders that are troubling indeed. **

Fallacy of hasty generalization. Three cases may not represent the whole.

**In Cleveland, Third Federal Savings and Loan has a 35 percent delinquency rate on its CRA-mandated “Home Today” loans, versus a 2 percent delinquency rate on its non–Home Today portfolio. **

Why has he shifted from the more serious “defaulted loans” to “delinquency rate?” He also has not specified what is included in the non-Home Today portfolio. All other loans? Quite possibly, since later he specifies “owned residential-mortgage portfolio.”

**Chicago’s Shorebank—the nation’s first community development bank, with largely CRA-related loans on its books—has a 19 percent delinquency and nonaccrual rate for its portfolio of first-mortgage loans for single-family residences. **

Again, he has failed to specify which loans are included in the portfolio. “Largely” CRA loans? Why no number, percentage, or specific kind? Even then, this is meaningless without knowing the expected delinquency and non-accrual rate for the loans in question. Working “Chicago” and “community development” in is also a nice touch.

And Bank of America said in 2008 that while its CRA loans constituted 7 percent of its owned residential-mortgage portfolio, they represented 29 percent of that portfolio’s net losses.

I love statistics like this one. First, if I wanted to be ornery, with equal accuracy I could rephrase it as “A whopping 71% of Bank of America’s owned residential mortgage losses were not CRA related.” Heh, heh.

Even so, it’s still meaningless without numbers he has not provided. What if I had 93 dollars invested in non-CRA mortgages and 7 in CRA mortgages. Investments gain and lose value constantly. Say I lost a dollar. This would mean I lost $.29 on the CRA portion, and $.71 on the non-CRA. My CRA holdings are now worth $6.71, and my other holdings $92.29 - but my total portfolio is still only down 1%. It’s disproportionate, but I still only lost a dollar.

Whatever the precise magnitude of the CRA’s role,

Slippery phrasing here. First, he has no idea what the role was. Somewhat circular reasoning, as it assumes CRA had a role. Maybe it did but he hasn’t shown it. “Precise magnitude” is clever too. Of course, zero is also a “precise magnitude,” yet the word magnitude itself often connotes “large.”

…there is no question that as the government pursued affordable-housing goals—with the CRA providing approximately half of Fannie’s and Freddie’s affordable-housing purchases…

Cum hoc ergo propter hoc fallacy - concurrence does not show causation

**—trillions of dollars in high-risk lending flooded the real-estate market, with disastrous consequences. **

True, but this fact, including it’s imprecise “gee whiz” number, does not support his argument.

I could go on but I won’t. This is the kind of statistical garbage that spews forth from left and right and in-between. It was not lost on me that the presumably liberal folk who compiled that $4.2 trillion dollar figure for their presumably liberal audience were also neck-deep in BS.

I’m not taking a position on this one, fer or agin. I don’t really want to get into the housing crisis, especially not in this thread. Maybe CRA is horrible. All I know is this guy didn’t show it. He’s just throwing a lot of numbers around. Still, I wish statistics was a mandatory course in school. If you really look at a statistic, you can avoid learning lots of things that aren’t so.

 

[anthony022071]

Hello John (OP) -

I can’t help replying here, but I have read many of the replies in this thread, and I think one point needs to be made clear. If you read the Church teaching (CCC 2419 - 2463) and/or Rerum Novarum (available online), you will find that the socialism condemned by the Church and the “socialism” condemned by Fox “News” is not the same thing.

The Church condemns totalitarianism, atheism, the abolition of private property, and that sort of thing.

Leo 13 condemned socialism as a false means to help the poor,not just because it entailed tolalitarianism,atheism and the abolition of private property. At the time when Rerum Novarum was written,socialism was primarily an intellectual and popular movement that many Catholics,including some of the clergy,had been seduced into supporting. It was not yet an established form of government. Even though European socialism is not totalitarian,and does not abolish religion or private property,those tendencies are there. It tends toward the gradual increase in government power through laws and programs,fosters a relativistic and materialistic (only the material world is real) world view through the school system and media,restricts Christian expression and influence through laws,usurps the traditional responsibility of Christian institutions to help the needy,confiscates too much property from the citizens,and exerts too much regulation over businesses.

 

[Cricket123]

Cricket…still waiting on your answer concerning subsidiarity. Been a while since you started preparing it. Did you run into a snag?

Why? Are you anxious to hear it?

Geowitz asked a serious question that requires a serious answer. Snags are inevitable. Still, if you’d like to participate, how would you recommend we determine whether a given social function is within the proper competence of a given social unit?

Extra credit if you answer within 24 hrs. in under 6000 characters.

 

[Monk21]

I think you guys need to look down at the simpler things in life. These problems are going on all over your land. The article is very long and I thought that just a hint of what is going on might make you think abt how wonderful your system really is.

One of our weekly magazines here in Canada called MacLean’s did an article entitled “Third World America”.
Here are some snippets of what is happening to your once powerful USA.

1. In Ohio’s Ashtabula County they faced a scene familiar to local governments across America, a budget shortfall. They began to cut spending and reduced the sheriff’s budget by 20%. A law enforcement agency staff that only a few years ago numbered 112, and had subsequently been pared down to 70, was cut again to 49 people and just one squad car for a county 1,900 sq. km along the shore of Lake Erie. The sheriff dept adapted. “WE have no patrol units; there is no one on the streets. We respond to only crimes in progress. We don’t respond to property crimes,” deputy sheriff Ron Fenton told Maclean’s. Now there is no detective division. We are down to one evidence officer and he just runs the evidence room in case someone wants to claim property,” said Fenton. “People are getting their property stolen, their houses broken into and there is no one investigating. We are basically just writing up a report for the insurance company.
2. Paved roadways are being torn up and the towns are converting to gravel because there is less maintenance cost. Michigan has converted 50 miles of paved roads to gravel in the last few years.

 

[Geowitz]

Heh, heh. I though you might ask me that after I posted. Fair enough. No, I don’t. On the other hand, I do find more credibility in a statistical analysis that has 7 tables of the statistics in question appended. These could be questioned too, but still…

Exactly… they are in question. The manner in which they are broken down and presented doesn’t even come close to giving the whole picture. Wow, seven cherry picked appendices… from a few years of the implementation of the CRA. The inclusion of statistics is great, but he’s using very specific numbers from a few years to generalize the entire implementation of the CRA which has much more history and future unfortunately.

Obviously, we’ve digressed considerably from my original point. My intention was never to defend socialism as such, or “big government,” and certainly not every federal policy. I think housing came up because one of Abu’s links led me to an article on housing. The housing crisis is not an area of particular expertise for me. However, statistical analysis is. Just for fun, and without arguing either side of the issue, let me parse some of the article you quoted:

You are defending the socialism that the church opposes. You just say you aren’t defending socialism because you are redefining the idea of socialism and its tenents that the church opposes.

**"To begin with, the CRA defenders’ claim that CRA lending mostly wasn’t subprime is highly misleading. It would be more accurate to say that 90 percent of CRA lending wasn’t classified as subprime. **

OK, he wants to change the definition of “subprime.” Why? Also, CRA lending covers much more than home mortgages.

He’s not changing the definition of subprime at all. He’s saying that the implication of focusing solely on “subprime” distracts people from the fact that subprime loans aren’t the only bad loans made.

**CRA lenders, along with Fannie Mae and Freddie Mac—the two government-sponsored entities that bought loans from lenders, enabling them to make more loans—commonly classified CRA loans as “subprime” only if they contained such features as high fees, high rates, or low initial payments with adjustable interest rates. **

But most lenders also classified non-CRA loans as subprime this way. He also here subtly implies that Fannie and Freddie were the only entities buying loans from lenders.

See point above. Again, his point is that subprime loans are not the only bad loans. It’s about the Fed article using the definition of something so specific so as to distract from the overall condition of the effects of the CRA.

But approximately 50 percent of CRA loans for single-family residences were nevertheless made to borrowers who made down payments of 5 percent or less or had low credit scores—characteristics that indicated high credit risk. Whether or not anyone called these loans “subprime,” in other words, the chances are good that many of them have defaulted or remain at high risk of doing so.

“The chances are good…” In other words, even I realize I have not supported my assertion, but I hope you won’t notice.

Again, he’s pointing out that “subprime” as an exclusive term that only bad loans can have is misleading because it ignores many other factors that affect the success of a loan. He doesn’;t care whether you call it subprime or not. No argument about the definition here really. It’s about the misconception of subprime being the only way a loan is determined to be bad.

And give me a break. Are you ignorant enough to not understand chances?

**Though the feds, again, haven’t collected figures for CRA loans’ performance as a whole, we do have statistics from a few lenders that are troubling indeed. **

Fallacy of hasty generalization. Three cases may not represent the whole.

First of all you are ignoring the fact that the feds haven’t collected figures for performance overall. Fallacy? Three cases is a good start for any short article.

**In Cleveland, Third Federal Savings and Loan has a 35 percent delinquency rate on its CRA-mandated “Home Today” loans, versus a 2 percent delinquency rate on its non–Home Today portfolio. **

Why has he shifted from the more serious “defaulted loans” to “delinquency rate?” He also has not specified what is included in the non-Home Today portfolio. All other loans? Quite possibly, since later he specifies “owned residential-mortgage portfolio.”

Uhhh… “Home Today” IS the CRA portfolio. It’s the part of the portfolio with ONLY CRA loans. The “non-Home today” portfolio are HOME LOANS not a result of the CRA.

“Though the feds, again, haven’t collected figures for CRA loans’ performance as a whole, we do have statistics from a few lenders that are troubling indeed.”

• Yes, he has shifted because the info on DELINQUICY IS NOT PROVIDED SINCE THE FEDS AREN’T PROVIDING IT. He doesn’t have anything to go by so he uses the next sginificant info he can find. And even then it comes from the banks.

 

[Geowitz]

**Chicago’s Shorebank—the nation’s first community development bank, with largely CRA-related loans on its books—has a 19 percent delinquency and nonaccrual rate for its portfolio of first-mortgage loans for single-family residences. **

Again, he has failed to specify which loans are included in the portfolio. “Largely” CRA loans? Why no number, percentage, or specific kind? Even then, this is meaningless without knowing the expected delinquency and non-accrual rate for the loans in question. Working “Chicago” and “community development” in is also a nice touch.

Chicago’s Shore Bank is a “Community Development Bank”. It’s purpose is to serve low- to moderate-income areas. They are certified by Feds and specialize in CRA loans.

And Bank of America said in 2008 that while its CRA loans constituted 7 percent of its owned residential-mortgage portfolio, they represented 29 percent of that portfolio’s net losses.

I love statistics like this one. First, if I wanted to be ornery, with equal accuracy I could rephrase it as “A whopping 71% of Bank of America’s owned residential mortgage losses were not CRA related.” Heh, heh.

Even so, it’s still meaningless without numbers he has not provided. What if I had 93 dollars invested in non-CRA mortgages and 7 in CRA mortgages. Investments gain and lose value constantly. Say I lost a dollar. This would mean I lost $.29 on the CRA portion, and $.71 on the non-CRA. My CRA holdings are now worth $6.71, and my other holdings $92.29 - but my total portfolio is still only down 1%. It’s disproportionate, but I still only lost a dollar.

Are you telling me that if you lost 29% of your business from only 7% of your customers that would be ok and expected by you? Your analogy is meaningless though. The point is in the disparity of 7% providing 29% loss. I hope you don’t run a business.

Whatever the precise magnitude of the CRA’s role,

Slippery phrasing here. First, he has no idea what the role was. Somewhat circular reasoning, as it assumes CRA had a role. Maybe it did but he hasn’t shown it. “Precise magnitude” is clever too. Of course, zero is also a “precise magnitude,” yet the word magnitude itself often connotes “large.”

Both his and your comments are examples of opinions/commentary. All a part of writing an article and response. Your previous article had many examples of the same - implications, inferences, and conclusions. I took your article for what it was worth - an article of implications, inferences, and conclusions. I found it easy to disagee with the implications, inferences, and conclusions, while your response seems to be more concerned with a conniving “gotcha” which totally misses the point of the article.

…there is no question that as the government pursued affordable-housing goals—with the CRA providing approximately half of Fannie’s and Freddie’s affordable-housing purchases…

Cum hoc ergo propter hoc fallacy - concurrence does not show causation

Thanks for the Latin lesson. How witty of you.

Are you really going to argue with this statement?

**—trillions of dollars in high-risk lending flooded the real-estate market, with disastrous consequences. **

True, but this fact, including it’s imprecise “gee whiz” number, does not support his argument.

That’s been your opinion of this whole post. Why are you restating it. The wrtier obviously disagrees with you. And are you really basing your argument on the fact that his number is imprecise. It’s imprecise because it’s been horribly tracked, but it’s not disputable that the number is in the trillions LIKE HE SAYS.

I could go on but I won’t. This is the kind of statistical garbage that spews forth from left and right and in-between. It was not lost on me that the presumably liberal folk who compiled that $4.2 trillion dollar figure for their presumably liberal audience were also neck-deep in BS.

I’m not taking a position on this one, fer or agin. I don’t really want to get into the housing crisis, especially not in this thread. Maybe CRA is horrible. All I know is this guy didn’t show it. He’s just throwing a lot of numbers around. Still, I wish statistics was a mandatory course in school. If you really look at a statistic, you can avoid learning lots of things that aren’t so.

Your argumentation is based tremendously upon the wit in your post. Manufacturing that “gotcha” moment while totally ignoring the logical conclusions being drawn in what remains a great SUMMARY. Just look at most of your responses. You’re more worried about defining debate tactics than debating the actual points of the article.

 

[Geowitz]

house.gov/apps/list/hearing/financialsvcs_dem/pinto_testimony.pdf

Purpose of the testimony in front of the financial services committee that Pinto’s article was based on…

*"The questions you should be asking are:

Why don’t bankers know and disclose how their different products are performing?

Why is it that the Federal Reserve, the OCC, the OTS and other regulators appear to have no idea how CRA loans are actually performing over the last few years. Data from ten years ago cannot be the basis for making decisions on multi-trillion dollar programs.

Why is it that Comptroller Dugan just three weeks ago delivered remarks at the Interagency Community Affairs Conference where he asserted that CRA is not toxic lending, yet he failed to cite any broad-based quantitative evidence?

Why is it after requiring banks to demonstrate that they make extensive use of “innovative and/or flexible lending practices” in order to receive a rating of outstanding, not one regulator had the common sense to track the performance of these admittedly innovative and flexible loans?

Platitudes are not sufficient. I have presented a prima facia case that CRA is toxic lending which leads to unsustainable loans which leads to an unacceptable level of foreclosures.
Gale Cincotta’s views on FHA 11 years ago are now equally applicable to CRA and AH lending:
“We have been fighting abuse, fraud, and neglect of the FHA program that has destroyed too many neighborhoods and too many families’ dreams of homeownership for more than 25 years.”

Section D of H.R. 1479 calls upon the Federal Reserve to create a loan performance database.

I respectively submit that before you take any action on H.R. 1479, you demand that the appropriate regulators request detailed CRA performance data from Wells Fargo, JP Morgan Chase, Citibank, Bank of America, Fannie Mae and Freddie Mac. These six institutions should be able to provide performance information for an estimated 70% or more of outstanding CRA loans.

These programs have subprimed America."*

 

[Geowitz]

Socialism…it’s a process and we’re headed down that track with policies in the CRA.

 

[luvzminis]

You link socialism and euthanasia…that is quite a Fox News Sarah Palin Death Panel induced leap…help me to understand your thought process…I lived in a European country that was a socialist democracy and I don’t recall anyone practicing euthanasia??? They simply taxed everyone an equal rate higher than what we pay here, however, no one paid for school, university, health care, toll roads etc…all the things we need. The tax rate was applied equally with no loopholes or deductions. Seemed pretty fair to me. Everyone chipped in an equal percentage and everyone’s basic needs were met. Where’s the problem??? Where’s the conflict with Christ’s teachings?? I think many here are discussing something other than what I experienced living in a country with a socialist system. Perhaps they have heard “scary stories” from certain news channels or politicians. I simply request that you stop commenting on what you do not know~Please?

With all due respect, I find myself a little more than suspicious of your comments here. They certainly do not jibe with the history of socialism in so many countries, and the fact that people do not leave the U.S. to go to live in socialist countries; they leave socialist countries to go live in the U.S. so they can regain freedom. Perhaps the country you live in is not a socialist country after all, or maybe they are trying to once again become a democracy and free? Socialism is in no way free or equal–just ask those who have been persecuted and have escaped socialism for a better life.

So much of what you seem to label negatively here (FOX News, Sarah Palin-death panels) is very simply something you have yet to come across–if indeed you are living in a socialist country)…or could it be you don’t want to share the whole story?? I’m not pointing an accusing finger here, but have certainly seen my share of people on these forums who don’t tell the full story. I’m not saying that is you, but strange how liberal apologists seem to appear ‘magically’ at such posts.

A key thing to remember is that the Catholic Church is the #1 obstacle to socialism which is why we are seeing so much hate against the Church today by those who prefer enslavement to government to freedom. Contrary to what the media and Leftists in this country (and elsewhere) want you to believe, the Church is about TRUE freedom. So in so many ways, FOX News and Sarah Palin are correct and are trying to educate people. However, on the other hand, they don’t have full truth as they are NOT the Church, so if we really want what’s best, we’ll follow God and His Church–the Catholic Church…

 

[Cricket123]

I hope you don’t run a business.

Fortunately, I don’t run a business. I teach statistics.

Your argumentation is based tremendously upon the wit in your post.

You’re right. I’m making a joke. But the only point I’m arguing is that the statistics in the article do not demonstrate the point he is making. I understood the article. To summarize: “As a former official of Fannie Mae, I have expertise in these matters, and it is my view that CRA contributed to the housing bubble.”

Now that’s fine. I will also grant that the testimony you linked to in a later post is a bit more convincing, but I was commenting on the first article.

Even so, I pretty much reject any analysis of the housing bubble that does not put the responsibility squarely on Wall Street for one simple reason: before any of these government agencies or regulations, Wall Street, through deliberately manipulated speculation, drove the country into the Great Depression.

Then, we got most of these government agencies and regulations. So Wall Street created a derivatives market outside of these, and through deliberately manipulated speculation, did it again.

We seem to agree that the Federal Reserve is part of the problem. But the Federal Reserve is not controlled by the government. The government is controlled by the Federal Reserve. It is impossible to determine which member banks own the Fed, but among its original creators were Goldman Sachs and J. P. Morgan, the two biggest “winners” in the current crisis.

I doubt that this has changed.

The government does not control the money supply. The banks do, and they have created most of the money in existence. Any time someone takes out a loan, new money is “printed,” and this far exceeds anything done by the Treasury.

Over half our national debt is “owed” to the Federal Reserve. What this suggests to me is, if we nationalize the Federal Reserve, we halve our national debt instantly. And dramatically reduce the power of the Wall Street in the bargain. Is this socialism, or sanity?

You are defending the socialism that the church opposes. You just say you aren’t defending socialism because you are redefining the idea of socialism and its tenents that the church opposes.

No. I am not defending anything the Church opposes.

Economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value. But it also needs just laws and forms of redistribution governed by politics Benedict XVI - Caritas In Veritate

“Forms of redistribution governed by politics”: is there more than one way to understand this? Yet leaving aside the question of subsidiarity on the federal level, the same people who protest any federal spending protest any state or municipal spending. Even if I completely grant your opinion that the federal government should not be involved, far from prohibiting government involvement in wealth redistribution, Pope Benedict is calling for it.

Is the Pope Catholic?

 

[Cricket123]

One more thing: a personal story which proves nothing, but does speak to the irresponsibility of the banks in general.

My wife and I bought a house in 2004. It wasn’t that we wanted to get in on the housing market or invest, just life. We had another baby coming and needed a bigger place. Housing is expensive here. We both have excellent credit, but relative to the housing prices, our down payment was necessarily going to be no more than 5% - a supposed risk factor.

Obviously, we didn’t go for any of the “sucker mortgages”: interest only, creative ARMs, or any of those other things. We got a non-CRA, 30-year fixed, regular ol’ mortgage, which, despite our “risk” is not only current, but overpaid through extra principal abatement payments.

OK. So what? Here’s what I think is interesting. The bank approved us for almost* twice* what we felt we could reasonably afford. Twice. Now, I do believe people need to take responsibility for bad financial decisions. But I also think that many people, low-income or not, believed in the banks and thought that they would not be approved for these loans if the appreciation of housing wouldn’t cover the bank’s, and thus their own, finances. Why would the banks loan the money if they thought the collateral didn’t cover it? Now this may not be all that smart, but it has some basis in reason.

What they didn’t know was the banks didn’t care. They had no risk. They just wanted to make the loan, to “print money” as fast as they could, then to make even more money on the derivatives.

Whatever role CRA played, the fact is the banks were aggressively marketing loans across the board - the risk was everywhere, not just, or even primarily, in low-income areas. In terms of dollars, I would suspect one foreclosure on a “starter castle” creates more damage than several foreclosures in the CRA market.

 

[Geowitz]

Fortunately, I don’t run a business. I teach statistics.

You’re right. I’m making a joke. But the only point I’m arguing is that the statistics in the article do not demonstrate the point he is making. I understood the article. To summarize: “As a former official of Fannie Mae, I have expertise in these matters, and it is my view that CRA contributed to the housing bubble.”

Now that’s fine. I will also grant that the testimony you linked to in a later post is a bit more convincing, but I was commenting on the first article.

Even so, I pretty much reject any analysis of the housing bubble that does not put the responsibility squarely on Wall Street for one simple reason: before any of these government agencies or regulations, Wall Street, through deliberately manipulated speculation, drove the country into the Great Depression.

What? So we need reparations for the great depression from today’s wall street?

We should probably avoid running off on another tangent in this thread, but since you brought it up and it still shows the ill effects of socialism… It is completely foolish and ignorant of you to believe by any stretch of the imagination that the responsibility lies squarely with wall street. It is also completely laughable that you would claim that the great depression was caused during a period void of government involvement and regulations. We haven’t seen ANYTHING even close to a free market in the US where government does its actual primary job and protects rights in over 100 years. It was exactly the lack of correct focus of the government that caused the great depression.

Then, we got most of these government agencies and regulations. So Wall Street created a derivatives market outside of these, and through deliberately manipulated speculation, did it again.

Exactly, the government policies were setup to protect us FROM a “known harm”, not to ultimately protect our rights so we got crony capitalism and another socialistic policy.

We seem to agree that the Federal Reserve is part of the problem. But the Federal Reserve is not controlled by the government. The government is controlled by the Federal Reserve. It is impossible to determine which member banks own the Fed, but among its original creators were Goldman Sachs and J. P. Morgan, the two biggest “winners” in the current crisis.

I doubt that this has changed.

The government does not control the money supply. The banks do, and they have created most of the money in existence. Any time someone takes out a loan, new money is “printed,” and this far exceeds anything done by the Treasury.

Over half our national debt is “owed” to the Federal Reserve. What this suggests to me is, if we nationalize the Federal Reserve, we halve our national debt instantly. And dramatically reduce the power of the Wall Street in the bargain. Is this socialism, or sanity?

End the Fed. The government is allowing the fed to overpower it. The problem is they are allowed to monetize debt. Your proposal is a band aid and ultimately the real problem is fiat currency, which is certainly not in line with Catholic thought.

 

[Geowitz]

No. I am not defending anything the Church opposes.

Fine, you’re claiming that the church promotes what you are defending.

Economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value. But it also needs just laws and forms of redistribution governed by politics Benedict XVI - Caritas In Veritate

“Forms of redistribution governed by politics”: is there more than one way to understand this? Yet leaving aside the question of subsidiarity on the federal level, the same people who protest any federal spending protest any state or municipal spending. Even if I completely grant your opinion that the federal government should not be involved, far from prohibiting government involvement in wealth redistribution, Pope Benedict is calling for it.

Is the Pope Catholic?

Can anybody say “straw man” argument? I am not one of those who would protest state and municipal funding for many things we would agree on so I can’t speak for those who do. What is your point? …And subsidiarity cannot be left aside.

“Even if I completely grant your opinion that the federal government should not be involved, far from prohibiting government involvement in wealth redistribution, Pope Benedict is calling for it.”

Again, you still want to ignore the most important distinction in this debate (to which you still can’t answer my previous question). Federal involvement can be neccessary, but only within the context of the principle of subsidiarity.

Here is the next paragraph from the encyclical you quoted - which is included by Benedict as a direct clarification of what you quoted.

“38. My predecessor John Paul II drew attention to this question in Centesimus Annus, when he spoke of the need for a system with three subjects: the market, the State and civil society[92]. He saw civil society as the most natural setting for an economy of gratuitousness and fraternity, but did not mean to deny it a place in the other two settings. Today we can say that economic life must be understood as a multi-layered phenomenon: in every one of these layers, to varying degrees and in ways specifically suited to each, the aspect of fraternal reciprocity must be present. In the global era, economic activity cannot prescind from gratuitousness, which fosters and disseminates solidarity and responsibility for justice and the common good among the different economic players. It is clearly a specific and profound form of economic democracy. Solidarity is first and foremost a sense of responsibility on the part of everyone with regard to everyone[93], and it cannot therefore be merely delegated to the State. While in the past it was possible to argue that justice had to come first and gratuitousness could follow afterwards, as a complement, today it is clear that without gratuitousness, there can be no justice in the first place. What is needed, therefore, is a market that permits the free operation, in conditions of equal opportunity, of enterprises in pursuit of different institutional ends. Alongside profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves. It is from their reciprocal encounter in the marketplace that one may expect hybrid forms of commercial behaviour to emerge, and hence an attentiveness to ways of civilizing the economy. Charity in truth, in this case, requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.”

Control has its rightful place. That is not the argument here. Quit with the straw man arguments please. The level at which control is placed is what the argument is about. You do not seem to be participating in the real argument. Prove your premise first then you can go on to the implementation of the issues.

Here again lies the problem with socialism. It places control in the wrong hands. No one disagrees that helping the poor is a good thing in civil society. Yes, the pope says civil society should help the poor, but exactly how and at what level must be justified through subsidiarity.

 

[Cricket123]

I did not say leaving subsidiarity aside, but leaving subsidiarity aside on the federal level. You suggested in one post that I should propose single-payer in my own state. Now, regardless of whether this applies to you personally, any time a state tax increase is proposed here, the Citizens For Limited Taxation, really just a business coalition, get together to prevent it. They also come out in force whenever a municipality wants to raise property tax. The general consensus seems to be “all taxes bad - period.” And they have plenty of money to get their message out.

I am not ignoring your point on subsidiarity. I am saying that, regardless of what proper level of society is suited to implement a policy, Benedict is, in fact, recommending government policies be implemented.

And now the next passage of Caritas in Veritate:

"39. Paul VI in Populorum Progressio called for the creation of a model of market economy capable of including within its range all peoples and not just the better off. He called for efforts to build a more human world for all, a world in which “all will be able to give and receive, without one group making progress at the expense of the other”. In this way he was applying on a global scale the insights and aspirations contained in Rerum Novarum, written when, as a result of the Industrial Revolution, the idea was first proposed — somewhat ahead of its time — that the civil order, for its self-regulation, also needed intervention from the State for purposes of redistribution. Not only is this vision threatened today by the way in which markets and societies are opening up, but it is evidently insufficient to satisfy the demands of a fully humane economy. What the Church’s social doctrine has always sustained, on the basis of its vision of man and society, is corroborated today by the dynamics of globalization.

When both the logic of the market and the logic of the State come to an agreement that each will continue to exercise a monopoly over its respective area of influence, in the long term much is lost: solidarity in relations between citizens, participation and adherence, actions of gratuitousness, all of which stand in contrast with giving in order to acquire (the logic of exchange) and giving through duty (the logic of public obligation, imposed by State law). In order to defeat underdevelopment, action is required not only on improving exchange-based transactions and implanting public welfare structures, but above all on gradually increasing openness, in a world context, to forms of economic activity marked by quotas of gratuitousness and communion. The exclusively binary model of market-plus-State is corrosive of society, while economic forms based on solidarity, which find their natural home in civil society without being restricted to it, build up society. The market of gratuitousness does not exist, and attitudes of gratuitousness cannot be established by law. Yet both the market and politics need individuals who are open to reciprocal gift."

When both the logic of the market and the logic of the State come to an agreement that each will continue to exercise a monopoly over its respective area of influence…

This seems to me to be precisely what you would like to see happen.

Benedict is not rejecting the intervention of government for redistribution of wealth. He has not rejected the logic of public obligation, imposed by State law, or the implanting of public welfare structures. He is calling for these in a wider context of solidarity.

He also says:

In the face of the unrelenting growth of global interdependence, there is a strongly felt need, even in the midst of a global recession, for a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth.

Is this a violation of subsidiarity? No. He says this should be done in keeping with subsidiarity, yet he is clearly calling for a higher authority to remedy the defects of a lower one. So subsidiarity can work both ways - when a lower order of society fails to meet its obligations, perhaps these should be delegated to a higher authority.

 

[Geowitz]

Pulling back a little?

You have been ignoring the point of subsidiarity. Remember your comment a few pages ago about the constitution saying the federal government is supposed to “promote the general welfare”?. Then you couldn’t even get our type of gevernment right. We are not a united nation. We are united states. Seperate states. As far as policies you didn’t say “regardless of what proper level” - You have been claiming alll along that the federal government has the responsibility to intervene on many issues as constituted through “promoting the general welfare”.

Benedict is not rejecting the intervention of government for redistribution of wealth. He has not rejected the logic of public obligation, imposed by State law, or the implanting of public welfare structures. He is calling for these in a wider context of solidarity.

Again, straw man. I never said he was rejecting government involvement…at the right level.

He also says:

In the face of the unrelenting growth of global interdependence, there is a strongly felt need, even in the midst of a global recession, for a reform of the United Nations Organization, and likewise of economic institutions and international finance, so that the concept of the family of nations can acquire real teeth.

Is this a violation of subsidiarity? No. He says this should be done in keeping with subsidiarity, yet he is clearly calling for a higher authority to remedy the defects of a lower one. So subsidiarity can work both ways - when a lower order of society fails to meet its obligations, perhaps these should be delegated to a higher authority.

I’ll take the popes comments on general thought and principle, but he has no more weight with economics than physics. The united nations needs to be disbanded.

And the principle of subsidiarity doesn’t work that way. The point of subsidiarity is to lay responsibility where it actually belongs. Whether it is met or not is a different story all together. That’s like saying that because the banks can’t fulfill their responsible we have an obligation to bail them out. You were against the bailout were’nt you? Didn’t the bailouts only reward failure of responsibility? Be consistent. If a community fails to fulfill its responsibilities should we reward them by doing it for them? What about the burden we place on others for their stupidity? Even then, subsidiarity would demand that those closest to the failure exhaust their charity to help those affected out before it goes any further. It’s arguable though(especially in our society) that depending upon the situation whether help should be given in the first place.

 

[anthony022071]

how would you recommend we determine whether a given social function is within the proper competence of a given social unit?

You should flesh out what you mean by social function and social unit. Those terms,like “society”,are too general and empty of content. A family can be considered both a function and a unit,but those terms don’t do justice to what a family is and its purpose. If you mean by social function things such as charitable giving and works of mercy,or government agencies,and by social unit things such as local communities and districts and towns,then the answer is that charitable giving and works of mercy are always proper to any social context,because they are proper to mankind whereas government agencies are unnatural means for helping people. Whether or nor charitable giving and works of mercy are competent to take care of all the poor and needy and sick,they are are a matter of divine commandment. Their effectiveness depends upon the extent to which people have charity and mercy within themselves,which depends upon the grace of God. If all the doctors of a city were devout Catholics who took heed of God’s commandment to show mercy upon the poor and needy,then they would be willing and able to give treatment the poor who cannot pay for treatment. The more that charity and mercy thrive in a given social context,the more closely knit the people will be to each other,and the more closely knit they are,the more likely that the poor,needy and sick will be cared for. There would be no need for providence to come from governmental systems because it would be coming from “neighbors”,in the sense of the parable of The Good Samaritan.

See post 523 for my reply to your first post.

 

[luvzminis]

You should flesh out what you mean by social function and social unit. Those terms,like “society”,are too general and empty of content. A family can be considered both a function and a unit,but those terms don’t do justice to what a family is and its purpose. If you mean by social function things such as charitable giving and works of mercy,or government agencies,and by social unit things such as local communities and districts and towns,then the answer is that charitable giving and works of mercy are always proper to any social context,because they are proper to mankind whereas government agencies are unnatural means for helping people. Whether or nor charitable giving and works of mercy are competent to take care of all the poor and needy and sick,they are are a matter of divine commandment. Their effectiveness depends upon the extent to which people have charity and mercy within themselves,which depends upon the grace of God. If all the doctors of a city were devout Catholics who took heed of God’s commandment to show mercy upon the poor and needy,then they would be willing and able to give treatment the poor who cannot pay for treatment. The more that charity and mercy thrive in a given social context,the more closely knit the people will be to each other,and the more closely knit they are,the more likely that the poor,needy and sick will be cared for. There would be no need for providence to come from governmental systems because it would be coming from “neighbors”,in the sense of the parable of The Good Samaritan.

See post 523 for my reply to your first post.

Very well said, Anthony!

We’re constantly being sold a bill of goods whenever we hear how ‘great’ and ‘fair’ socialism is. As someone else pointed out, in theory, socialism sounds great–equality for all. But as many, many people who have been victims of socialism (and communism) can tell you, that’s definitely not the full story. Basically you end up with the ‘peasants’ bowing to the ‘king’ and if they want to move ahead at all, they should be prepared to sell their souls–much like the under-the-table and backroom dealings we see in corrupt government–and we’re certainly seeing much of that in our own country now.

Freedom means absolutely nothing to the leaders of such countries. Nor do religious rights exist, except, once again, on the surface–a type of pseudo church with no real doctrines, and again, it must follow government regulations. Human life, also, has no real value to such people. Remember–they believe themselves to be better than ‘the people.’ Which is why bells and whistles should be going off in the heads of anyone who is still swallowing the nonsense our current administration–with the help of the liberal media–is trying to sell us. Don’t buy it if you value your freedom and want a future for your children and grandchildren! Their goals are incredibly dangerous to families, which is why they’re working so hard to disguise them as something positive.

 

[illmatic]

ITT: Christians deliberately estranging people for absolutely no reason.

Consider socialism on its own merits. THERE IS NO PROBLEM. THERE IS NO CONFLICT. Christ’s teachings of equality, mutual love, disregard for wealth etc. are closer to socialism than anything else.

 

[Black_Rose]

Here is a bit on the “deregulation” of the CRA in 2005, that many “left-wing” organizations opposed. This is to dispel that notion that left-wing regulatory vigorously enforced it. Its summary:

In this final rule, OTS is making changes to its Community Reinvestment Act (CRA) regulations to reduce burden, provide greater flexibility to meet community needs, and restore the focus of CRA to lending. Specifically, OTS is providing additional flexibility to each savings
association evaluated under the large retail institution test to determine the combination of lending, investment, and service it will use to meet the credit needs of the local communities in which it is chartered, consistent with safe and sound operations.

And its proponents and opponents:

IV. The Comments
A. Overview
OTS received approximately 4,200 comments. The vast majority (about 4,000) came from consumer and community organizations and representatives (Consumer Comments). These included community development advocates, Community Development Corporations, Community Development Financial Institutions, housing authorities, consumer protection and civil rights organizations, faith-based organizations, and educators…These comments opposed the proposal…

In contrast, OTS received a couple of hundred comments from financial institutions and industry trade associations (Financial Institution Comments). Almost all of these supported the proposal, including the portion on assigned ratings…OTS considers the level of support significant.

So this piece of regulation allows flexibility in how institutions are judged by regulation in their adherence to the statute of the CRA. Originally, lending composed of 50% while service and investment comprised 25% each. This allows institutions to be judged in their compliance with different weightings declared by the institution. For instance, an institution can be judged with a greater emphasis on savings or investing, while lending has a smaller weighting.

While the CRA rule, as interpreted, provides some flexibility, OTS solicited comment in the 2004 NPR on providing additional flexibility in the way it assigns CRA ratings. OTS explained that the purpose would be to reduce burden while encouraging large retail savings associations to focus their community reinvestment efforts on the types of activities the communities they serve

As discussed in Part II.A. of this SUPPLEMENTARY INFORMATION section, the statutory language and legislative history of CRA confirm its appropriate lending focus. Given OTS’s responsibility to evaluate an institution’s performance in meeting credit needs, we believe it is appropriate to allow institutions to be evaluated with greater emphasis on lending than at present. At the same time, in recognition of the value to communities of investments and services, OTS is notmandating any decrease in the emphasis given to investments or services in an evaluation. **In fact, today’s final rule provides flexibility for savings associations evaluated under the large retail institution test to opt to be evaluated with the same or greater emphasis given to either investments or services than at present. ** Savings associations that do not want alternative weights do not have to do anything differently, as today’s final rule contains no mandatory changes in the way savings associations are evaluated.

The requirement that lending receive 50 percent weight is not codified in the current CRA rule, only in implementing materials. Accordingly, OTS is continuing that approach with respect to the requirement that any alternative weights selected accord a minimum of 50 percent weight to lending. OTS will incorporate that specification and other technical details for implementing alternative weights into guidance that it will issue separately.

The justification for this new regulation is as follows. Note how it uses the language of deregulation and “market efficiency” as a justification. It seems that this piece of regulation is not conducted with a left-wing spirit (generally, it is not left-wing rhetoric to emphasize “economic efficiency”).

Rather than rely on such predictions by opponents or supporters of the proposal, we have focused on the common-sense economic principle that allowing a savings association greater freedom to specialize in those things at which it is relatively more efficient should result in more, not less, real community development being delivered. Part of the idea behind allowing alternative weights is to not force a savings association to provide a service or make an investment that it cannot do efficiently—or that may not even be a central part of its business plan—and to encourage it to engage in activities at which it is relatively more efficient (i.e., where the savings association has a comparative advantage). By encouraging each savings association to meet its community development obligations through activities at which it excels, OTS anticipates gains in economic efficiency deriving from specialization. And these gains, in turn, will result in more effective, not less effective, community development.