Moral case for financial reform

By John GehringCatholics in Alliance for the Common Good As financial reform legislation stalls in the Senate for the moment … Continued

By John Gehring
Catholics in Alliance for the Common Good

As financial reform legislation stalls in the Senate for the moment and embattled Goldman Sachs CEO Lloyd Blankfein testifies today before a congressional subcommittee, faith-based organizations and religious leaders are mobilizing for stronger regulation of Wall Street.

Faith, labor and community groups will march through San Francisco’s financial district today to attend Wells Fargo’s annual shareholder meeting. A delegation will address the bank’s top executives and demand changes to corporate practices that have bankrupted families while enriching a privileged few. Tomorrow, faith and labor leaders will gather at Bank of America’s shareholder meeting in Charlotte, N.C. and urge the bank’s leadership to do a better job helping distressed homeowners refinance troubled mortgages.

The Interfaith Center on Corporate Responsibility, a coalition of faith-based investors, recently challenged Citigroup to provide greater transparency about its derivatives trading. The Maryknoll Center on Global Concerns produced a You Tube video and web site – Stop Gambling on Hunger – that shines a spotlight on how Wall Street speculation and greed drove up food prices around the world. Catholic social justice leaders issued statements yesterday highlighting financial reform as an urgent moral issue, and called for prudent financial regulation that protects families from corporate abuse. PICO National Network, made up of faith-based community organizations in 150 cities and 17 states, has launched an Our Money, Our Values campaign with the online advocacy group Faithful America.

The faith community is not a newcomer to this fight. Catholic social teaching, in particular, has long addressed the need for sound economic principles that serve the common good. Amid the global economic collapse of 1931, Pope Pius XI affirmed a positive role for government that tempers the vagaries of the market and stressed the social obligation to pay workers a living wage. Last summer, Pope Benedict XVI issued a timely encyclical that called for a dramatic rethinking of global financial systems and urged “greater social responsibility” on the part of corporate leaders. As Time magazine noted last week, Catholic sisters have invested in Fortune 500 companies to influence shareholder resolutions that spur CEOs to conduct business more ethically. While Ronald Reagan made government the enemy back in the 1980s, U.S. Catholic bishops released Economic Justice for All, a provocative pastoral letter that challenged the Gospel of Free-Market Fundamentalism and ignited heated debate about the moral dimensions of capitalism.

More than 2,500 lobbyists are registered to represent the finance, insurance and real-estate sector dominated by banking interests. As the Washington Post reported on Sunday, many top Wall Street firms have ramped up campaign contributions to lawmakers who oppose financial reform with real teeth. The Business Roundtable has nearly doubled the pace of its lobbying this year compared with 2009, spending at the rate of $25,000 a day during the first quarter. Faith-based organizations and community groups don’t have gilded expense accounts for lobbyists. But they do have the power of the pulpit and a unique ability to inspire social justice movements that challenge conventional wisdom. In this case, an angry and disillusioned public is already on board. About two-thirds of Americans support imposing stricter regulations on the way banks and other financial institutions function, according to a new Washington Post-ABC News poll.

Last year, the chief executive of Goldman Sachs justified outrageous bonuses paid to his employees by noting to a reporter that banks are “doing God’s work.” I will leave it to that big CEO in the sky to judge whether deliberately profiting from the mortgage meltdown falls under that auspicious category. What I do know is the titans of Wall Street will be hearing from people of faith inspired by the Hebrew prophets, the radical justice of Jesus Christ and a God who sides with the poor and abandoned over kings sitting high on their thrones.

John Gehring is Director of Communications for Catholics in Alliance for the Common Good.

John Gehring
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  • WmarkW

    There are enough people involved in this, that it seems you could form your own Credit Union For The Common Good; a non-profit organization that does nothing but old-fashioned banking and traditional fixed-rate mortgages, so people don’t have to hold their checking accounts with the gamblers.

  • DaveHarris

    There was that social psychology study recently which showed that people of faith were actually more likely to cheat than non-believers. Apparently they felt their God would look the other way, what with them being so holy and all. Expecting religion to be a force for discouraging unethical and criminal behavior is wishful thinking. It only encourages them.

  • papafritz571

    I agree with WMarkW. Our parents bought our family rowhouse using our local Savings and Loan and we paid them weekly. Every Monday my parents would send me to the S&L with our mortgage payment. We were treated respectfully and personally. Today few at our local Bank of America even recognize our faces. Everything we need from them is subject to office fees. So we are not only paying them monthly account management fees, we are also paying for office supplies and the salaries of their employees.

  • lufrank1

    Well . . . Whoop-de-do.A Catholic viewpoint I can support. In other words, it’s not a holdover from the Dark Ages.

  • MHawke

    Many faith based organizations managed to ignore the teaching of treating the least of their brothers well during the health care debate. The financial reform debate will split down the same political lines, with the religious conservatives being lead by the nose into some obscure rational for supporting Goldman Sachs.

  • skipsailing28

    As a Catholic I find some of Mr Gehring’s essay troubling.First, I wonder what is meant by the phrase “social justice”. I learned about “equal justice” during civics courses in school. But social justice needs to be defined.I don’t doubt the church’s desire to do good mind you, but I do question the method here. To me the church has always faced the challenge of convincing humans that avarice is sin. As I read the essay I wonder if the church is trying to outlaw greed. That’s a vain pursuit.I think that the concept of “helping distressed homeowners refinance troubled mortgages. ” while a laudable goal is doomed to failure. How many of these folks are in over their heads because they would not have qualified in a more rational lending environment?that said, I think the concept of using the investments owned by the church as leverage with banks makes good sense. Finding an institution that meets the moral standards of the church doesn’t seem impossible.And like a lot of Americans I’ve seen the emerging “two tier” banking system. As my beloved and I launch a business the bank that we’ve relied on for personal checking just isn’t interested. Another local bank, however is eager to fill the niche. And I’m seeing that more and more in my very depressed part of the country.Just a few thoughts.

  • jfv123

    This is ridiculous.Likewise, pining for your mortgage to be held by the S & L down the block may sound quaint and comforting, but its an ethical loser. If the S & L couldn’t sell your mortgage, it couldn’t make more loans to others until you repaid your mortgage. Your philosophy is that you’ve got your mortgage so screw everyone else looking for a mortgage after you get yours.Derivatives are useful instruments that allow people who make long-term commitments of large amounts of capital to shift risk to others who are willing to accept the risks.By all means, lets examine the system and see where it broke down (as it obviously did), but pius complaints about people who make the financial markets run is sickening and ethically reprehensible, which you can easily determine by looking at the health and education levels of countries that have working financial markets compared to those that don’t.

  • YEAL9

    John Gehring is Director of Communications for Catholics in Alliance for the Common Good. This “non-profit”‘s salaries/yr are in the range of $700,000/yr paid from donations in the range of $1 million/yr.The only specific annual salary listed on the IRS Form 990 is the $110,000 that the executive director makes. So where is the other ~$600,000/yr going ??From”Catholics in Alliance for the Common Good promotes awareness of Catholic Social Teaching and its core values of justice, dignity and the common good to Catholics, the media and Americans of all faith.”Is there common good and justice being practiced when such high salaries are being paid for apparently little work??Is there a moral case to be made for the reform of “non-profits”??

  • tjohn1

    We humans are limited by ourselves. In other words we are selfish by nature and we indeed should be selfish. We have to preserve ourselves at any cost. We could kill some one before he kills us. That is self defense. The U.S has used this method to launch wars against other countries in recent times. No one considers this unjust but as a right of a country to secure its people. It is true one can gain material wealth through honest means. That rarely happens. In a democratic society like ours with our own legal system to enforce so called justice many will adulterate our system to advance themselves. That is what is happening right now. The Congress may revise our laws to prevent these short cuts to wealth, human beings being selfish will bypass them. In other words there will be always social injustice. Yes, Jesus said the poor are always with you. So are the rich! No other way!

  • spidermean2

    Evolution’s Survival of the Fittest doctrine may have influenced these Goldman Sachs executives’ behavior. Officailly, Catholicsim, as a false religion, supports Darwinian Evolution. Aside from evolution, it is involved in a grand cycle of poverty.THE CATHOLIC CYCLE In one third world country where population explosion has become a major problem, Catholic chapels or centers offer free operation to untie the fallopian tubes of mothers after indoctrinating them that artificial contraception is a SIN. This devilish Church invent their own doctrines so parents would produce more children despite their abject poverty. With more extra children, they are forced to raise them with no proper education and decent meals and most of all, no future. They then teach these poor people that their government is the cause of their poverty due to corruption but lo and behold those same government personnel are usually “devout catholics”. Some revolt (with the church’s help of course) which cause more poverty and this has become a “CATHOLIC CYCLE” which I presume is routinely duplicated around the world. To escape poverty, many go abroad adding more economic pressure to their countries of destination.Catholic countries not only over populate, they produce extortionist rebels too. Had you wondered why there are no marxist rebels in Islamic countries but there are so many in catholic countries? It’s because many of their priests support that ideology. They breed fast and then kill each other fast too. WHAT A CYCLE.There are many things this church does which is outside our scope of detection. The devil could be using a much bigger cycle that is harder to detect. Consciously or unconsciously, all catholics is part of that grand cycle.This church teaches that poverty is blessed but when they become truly poor, then comes the blame game. Blaming other people except themselves.

  • wesatch

    And where is the AARP? Hiding out in another buffet line in Washington while the seniors that support them are getting hosed on their savings by the banks and the Federal Reserve?Savers are being taxed to support the profits of banks and reduce the interest on the federal; debt, while debtors, speculators on Wall Street and banks reel in the $$.

  • seasail

    Social justice and Wall Street is an oxymoron. It is beyond obvious that the small guy has no chance and NO MATTER what you do Wall Street will screw you out of your money. You can short it long it hedge it or what ever what and you will never win. Social Justice? What a stupid question.

  • spidermean2

    Banning short selling and derivatives will solve all these problems. You invest on a company and not bet and hope that the company would fail so one would profit.It defies logic to invest on something so that your child would fail in school and then celebrates when it happens.THIS IS MADNESS. IT’S SO REFRESHING THAT THESE MADMEN WERE CAUGHT. Maybe we should be allowed to bet if these people will go to jail or not. Pure madness.

  • Wilburpup1

    Excuse me but faith has no place in capitalism or financial regulation. Yes, we need some new regulations on deriviates and too big to fail, but I wonder what the good man thinks of the SEC lawyers who were streaming porn instead of enforcing the regs. already on the books? Many of them are still on the job. Are they are the ones who are supposed to protect us? Give me a break!! The problem isn’t markets; the problem is people.

  • spidermean2

    While true Christians believe that lying will send them to hell, what is stopping the idiotic atheists from lying just to profit?When God said that true Christians will inherit the earth, it means just that. We don’t even have to try coz it will just fall on our lap whether we like it or not.You guys should be very glad that you’re still breathing coz that’s the only line that keeps you from burning in eternity. The only way you can refute that is if you be able to make brains out of soil and water. God is real idiots.

  • djah

    With all due respect, I don’t see the “prosperity Gospel” folks otu there crusading against Wall Street abuses. The faith community is as corrupt (but no more so) as any other. There is one big difference. You will not hear one “faith” group condemn another, no matter how immoral the behavior. True in Islam. True in Christianity.

  • mhr614

    In the 20th century several governments emerged with the avowed aim of bringing social justice and equality to their citizens. Among them were the Soviet Union, Mao’s China, Cambodia, North Korea, East Germany and the entire Soviet bloc of eastern Europe. The experiment did not work out well. Liberal Democrats have run most of the urban centers of the US for decades and we know how that experiment has worked. Most Americans are very suspicious of utopian social engineers. With good reason.

  • spidermean2

    “You will not hear one “faith” group condemn another”Maybe you never heard of me.

  • spidermean2

    “Liberal Democrats have run most of the urban centers of the US for decades and we know how that experiment has worked.”Not true. Donald Trump’s book “The Art of the Deal” shows how liberal Democrats are a bunch of idiots.

  • spidermean2

    Most catholic countries are liberal democrats and they end up poor, and even killing each other fighting which ideology should they follow.The intentions are good but you don’t trust a blind person with good intentions to show you your way home, do you?Just ban short selling and revert back to the laws instituted to prevent the Great Depression in the 1930s from happening again.NO need for Catholic faith inputs coz most likely, they only cause more trouble. Stupidity only breeds stupidity.

  • Iupur

    Dear mhr61

  • yhrt

    Without enforcement actions, new laws and regulations are meaningless. If existing laws and regulations had been enforced over the past decade, the gambling casino called Wall Street wouldn’t have developed it’s trillion dollar capacity to make mistakes. If nobody is stopping them, they will keep on gambling away other people’s money…even if you put new stronger laws in place.

  • spidermean2

    Iupur,When you mix fallacy with facts, it’s called garbage. You spew a lot of garbage and I think it will tire me to show you how to segregate them.You should have been in Cambodia or Vietnam or Mao’s China decades back to tell them that their communistic social justice was just fine.The garbage you throw at Christianity is not accurate coz you don’t even know what is true Christianity.

  • camera_eye_11

    I think it’s hilarious how John Ensign was asking questions about Goldmans ethical practices when he’s under and ethics investigation.As for Arizona’s immigration law, “show us your papers” rings of Nazi Germany’s “show us your papers”.Zeig Heil GOP! Goodbye Republitards.

  • spidermean2

    “As for Arizona’s immigration law, “show us your papers” rings of Nazi Germany’s “show us your papers”. “This is what happens when a significant number of people don’t follow the law. It will only worsen if people come here wothout papers. Whoever thought this idiot that applying the law is unlawful?

  • OfConservativeMind

    @SkipSailing28I too, find it interesting that many churches and/or groups of churches seem to follow vain pursuits such as what you described.Vanity in itself is something, like avarice, lust, sloth, etc. that is unfortunately human in nature. Christianity and other religions try to tame humanity’s imperfections through a moral order, established by God, and those who It is a tragedy in this society, with a breakdown of faith at its underpinnings, that many people tend to view things in moral gray areas that, with the help of their bent compass, lend themselves more towards amorality. I must clearly state that those who do not practice religion are not precluded from morality, but those who “have no use for God” tend towards seeing themselves as the arbiters of their own existence; Removed from judgment, but for the laws of man and perhaps some “self-reasoned” morality ground in the secular world.Conversely, there are those who claim God and His blessings, but do nothing deserving of them. They do not attempt good works, nor charity, even in the home. They bend and break rules and law, to turn and ask God’s forgiveness. Forgiven their sins, they turn to break and bend once more.Both breeds are weak of will, and I self-reflect that I too have much to learn and aspire to in efforts to aid my fellow man and serve God and His will. Those who deny Natural law, or God’s law, that all men are equal and have unalienable rights that cannot be taken from them by men or governments, are those who prey on the weak, who stymie the efforts of others to better themselves, and fervently work to make individuals doubt their potential and thus not succeed. Let no one tell you that you are worthless, and take no quarter from those who have no faith in humanity to better itself.

  • Iupur

    Dear Spidermean,Secondly the fact that you are are mentioning cambodia/vietnam etc and Mao proves that you missed the point of my post, to be completely unambiguous, I hate China, communism and the current chinese govt etc (I myself am chinese) and I think that they are bullies and dictators, but as pointed out in my post”any time anyone says that they believe companies shouldn’t be able to rip people off, or that they support women’s rights, or gay right, or poor people earning enough money to live on, and suddenly morons like you whine about communism”ie just because I think wall street should be regulated to stop looting, or that people should be able to earn a decent living wage etc does not mean that I worship Karl Marx, and that to compare us to commies is as unfair as for me to call you guys Nazis or KKK members or terrorists etc so stop calling us “socialist” as it amounts to nothing more than childish name calling,Finally as for “true christianity” I’d really love for one of you guys to give me a rational explanation of what that means, I mean I’m sure Hitler thought he was a “real christian” when he said “I believe today that my conduct is in accordance with the will of the Almighty Creator.” I mean anytime any christian person or group does anything reprehensible there is always someone who says “they’re not real christians” well, you know if you define anytime anyone does anything good as a “real christian” and anytime anyone does anything bad as “not a real christian” then no matter what happens, no matter how many rapes and murders and mass murders and beatings etc happen in the name of christianity, all good acts no matter how few will be done by “real christians” and all bad acts, no matter how numerous and terrible will be done by people who are not “real christians”

  • skylark1

    to Spiderman, and those agreeing with him: the quality of life for most people, and especially working people in western Europe, Australia, and Canada is actually higher than in the US, where they don’t blindly worship out of control capitalism.

  • tossnokia

    You get what you get. I’m happy with what I don’t have.

  • ravitchn

    Social Justice, like all utopian schemes, can only lead to Communism or Fascism.

  • tojby_2000

    The flaw in our current private enterprise system is intrinsic.- Corporations are legally required to act in ways that maximize value for its shareholders.This, BTW, is the moral dynamic of the sociopath.

  • IgnorantHillbilly

    What a bunch of socialist hogwash. The only faith this author is talking about is faith in the Almighty State, which is his god. He is certainly not talking about biblical Christianity. He doesn’t say a word about the government facilitating and demanding, through Freddie and Fannie, that subprime loans be made and be implicitly guaranteed by the government; he doesn’t say a word about home buyers signing up for loans they could not possibly pay back; he doesn’t say a word about conservative Republicans not voting for TARP but rather wanting Goldman Sachs, AIG, Morgan Stanley, et al to founder for their cupidity. Wells Fargo was not deeply involved in the subprime mortgage meltdown yet this is one of the targets of his ire.Why is it that Catholic Central and South America, including Mexico, are impoverished while North America has known great bounties? Spain regulated and invested much more in her colonies than England ever did. According to this social justice “economist” that should have alleviated poverty, not fueled it. Yet the exact opposite happened. Could it be that Conservative Protestant Christianity, the religion of our forefathers, the religion of self-reliance and personal responsibility, the religion of biblical faith, is the greatest capital of all?

  • iamweaver

    mhr614 writes:”In the 20th century several governments emerged with the avowed aim of bringing social justice and equality to their citizens. Among them were the Soviet Union, Mao’s China, Cambodia, North Korea, East Germany and the entire Soviet bloc of eastern Europe.”——————————————————You seem to, somehow, ignore the word “avowed”. I challenge you to find someone who actually believes that that was the real goal of any of those regimes. The hilarious thing here is that you pick governments that were actually antithetical to the concept of social justice, then, somehow, try to turn them into examples.Better picks might be just about any first-world government in the world right now except for the US with strong social programs – and, of course, the US when it comes to Social Security/Medicare. Then, at least, you can make comparisons based on something resembling reality.

  • iamweaver

    IgnorantHillbilly writes:Not quite. He is speaking of using a (fallible) government working with the will of the people who empower it to enforce some Christian principles.Still, it’s pretty clear that Christ feels that one of a government’s responsibilities is some level of “social justice” (see Eze 22:6-7 for one example of many – and since Christ is the Word made flesh, we cannot ignore that the Old Testament is part of Christ’s message).

  • spidermean2

    Iupur, There are two types of Christianity. One based on “good works” to attain salvation, in which Catholicism belongs, and another which teaches that good works are results of a salvation experience which is a GIFT from God alone. The former is a false kind of Christianity where Hitler (a Catholic) belongs. . False religions are based on the idea that man can save himself by doing or following a set of belief system. What it actually does is building a SELF-RIGHTEOUS mentality. Catholicism, Islam, Hinduism, Buddhism, Judaism, etc all belong to this category.With or without laws that punishes lying, true Christians don’t lie. With or without a law that requires you to help the poor, true Christians help the poor. False religion’s kind of social justice is based on COERCION. Most societies that are ruled by dictators either practices Catholicism, Islam, Buddhism, Hinduism, etc. In societies where they practice false religions, you often hear the term “social justice” but you don’t often see them.I also would like to add that true Christians are scientific people. I believe that short selling and derivatives should be banned coz they don’t follow the natural laws of science. In other words, it’s a form of magic or trickery. Those who know the trick profits to the disadvantage of those who play fairly.Goldman Sachs is guilty of trickery.

  • iamweaver

    Feel free to discount John’s message, Yeal9. Just don’t think that you can “disprove” Christ’s divinity, any more than I can “prove” his divinity.

  • cassie123

    I think that these protests outside the shareholder meetings are all good and well — it lets these CEOs know that people are unhappy with how they are treating those under them. As far as government regulation and “social justice” — I have voiced my concern on this subject before here. Who defines social justice? Who sets the new “moral code” that we are all to follow? Congress? — who cater to special interest groups (unions, etc.) and have more scandels than I can even number in just 1 week? I have a problem with that! Social justice sounds nice on the surface, but in reality it is impossible to practice without the leaders trampling on those below them. (see examples of countries that attempted to obtain that utopian society – Soviet Union etc — many of which, by the way, began with somewhat good intentions).The fact is that the government (both democrat and republican) contributed to the economic meltdown along with the banks. And what gets me is that the government is investigating the banks for these meltdowns…this is just a waste of time allowing congressmen to try to obtain better policital footing..I am not fooled. For example, the government wanted everyone to have the ability to own a home (which is a wonderful thing to desire…but dangerous to just go out and get). Because of this belief they willing allowed these risky mortgages and surprise surprise…people who shouldn’t have been able to get loans for homes (because in reality they couldn’t afford them were given these loans). Of course, I also think there is some personal responsibility here on those folks as well.Bottom line: government regulation, if any, should be light…and carefully considered.

  • cassie123

    There was one post on here that I agreed with…they said that the problem of the financial situation was the people not necessarily just Wall Street. Unfortunately, people are selfish. That will not change. Even those who claim to be religious can be selfish and take advantage of others, as many people on this post are all too happy to point out :). As a Christian, I am saddened by that, but I do not shy way from the truth. No matter how much government regulation is imposed — it will not change anything as long as people are involved. Human nature is inherently sinful. People’s attitudes need to change. People need to exhibit good character and love for those around them. The only way to do this is through Jesus.I am not necessarily using the above as an excuse against government regulation but it is just an observation.

  • iamweaver

    Cassie123 writes:The Soviet Union was only begun with somewhat good intentions by one of the top 3 revolutionaries, and he was shot. Get real.I can point to a number of governments who attempt to care for the poor and needy, and make sure that they aren’t trampled by the legal and economic systems under which they live. The US, Canada, the UK, Sweden, the Netherlands, Denmark, Iceland…I don’t see these systems attempting any kind of “utopia” (the etymology of the very name explains why) – but you don’t have to aim at utopia when aiming for social justice.Some detractors here (and other places) mistakenly try to make social justice equivalent to some form of economic equality, which is silly. It’s never represented “equality” – because things aren’t equal. People aren’t equal in that kind of simplistic sense – that nice dramatic tension is demonstrated in the US Declaration of Independence, which starts out with the (simplistically) absurd statement that “All men are created equal”.