Economics

By Fr. Gregory Jenson

Our economic life is concerned with more than just the objective exchange of goods and services.  Far from being morally neutral, it is an expression of how we understand our dependence on God and neighbor and is the means by which we fulfill, or not, our obligations toward them.  Both for reasons of morality as well as long term economic efficiency, we cannot overlook or minimize the centrality of personal virtue, and of a culture of virtue, to the success of the free market.  It is not enough for me to be good; we must be good together.  Or at minimum, and whatever our personal moral shortcomings, culturally we must value and reward moral excellence.

Jack Cashill understands this and in his new book, Popes and Bankers: A Cultural History of Credit and Debt, from Aristotle to AIG, he traces the changing moral attitudes towards lending and borrowing in Western culture.  From the beginning the author is clear that we cannot separate a conversation about debt and credit, and so the economics of the free market, from a conversation about our personal and cultural moral lives.

Quickly the author takes us through some 25 centuries of social history.  Along the way we hear from Dante and Shakespeare. To my delight, The Merchant of Venice has a recurring role in Cashill’s analysis and he uses effectively the changing portrayals of Shylock to illustrate shifting cultural attitudes toward debt.  

Aristotle and Aquinas also make an appearance and join a cast that includes Medieval popes, Renaissance Jewish lenders, Protestant Reformers, 19th Century American robber barons and financiers.  And of course our favorite villains, the bankers, lenders and borrowers who figure so prominently in the recent economic collapse make an appearance.  Though the tone is at time a bit too flippant for my tastes (especially when discussing the Medieval Catholic Church), the text offers a good historical overview of the cultural and moral debate about debt. Throughout the author highlights intimate connection between moral character and economic life.

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AOL Daily Finance By Peter Cohan

On May 2, Greece announced a deal to get a bailout from the European Union and the International Monetary Fund. But as part of the agreement, Greece needs to cut government spending in ways that are causing social unrest. That chaos could get so bad that Greece might decide it’s better simply to forget about the bailout and “restructure” its debt.

Greece will make budget cuts ranging from $40 billion to $53 billion each year so that by 2014 its budget deficit falls from the current 13.6% to below 3% of GDP. And this will mean recession in Greece for years: A 4% GDP contraction in 2010, a 2.6% decline in 2011, followed by anemic 1.1% growth in 2012.
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