The Economy Has Tanked And It’s Your Fault

Nov. 21, 2008 ( – Did Pope Benedict predict the current worldwide financial crisis?

During the past few days dozens of newspapers have run a report suggesting that the Pope had warned about the coming financial meltdown, more than 20 years ago. But more sober analysis shows that the then-Cardinal Ratzinger had something quite different in mind when he made the remarks that are now being cited as a “prophecy.”

The claims that the Pope forecast the collapse of world financial markets originated with a November 20 Bloomberg reportcarrying the provocative headline: “Pope had ‘prophecy of market collapse in 1985.’ The Bloomberg story quoted Italy’s finance minister, Giulio Tremonti, as saying that in an article he wrote in 1985, the future Pontiff made “the prediction that an undisciplined economy would collapse.”

Speaking at Milan’s Catholic University, Tremonti called attention to a paper that Cardinal Ratzinger had delivered at a 1985 seminar on “Market Economy and Ethics.” The future Pope said that a breakdown on moral principles “can actually cause the laws of the market to collapse,” the Italian finance minister recalled.

It was the Bloomberg headline, not Tremonti’s own words, that gave rise to the suggestion that the paper Cardinal Ratzinger delivered in 2005 contained some sort of economic prognostication. Actually the future Pontiff was making a point that should be familiar to anyone with a passing interest in Catholic social teaching; he was insisting that the working of a free-market economic system must be buttressed by the principles of Judeo-Christian morality.

In a sober analysis of the text that the German cardinal delivered at that 1985 seminar, Jordan Ballor of the Acton Institute supplied the relevant quotation from the Ratzinger text:

It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse.

That statement obviously is not intended as a prediction of particular trends in the world’s financial markets; it is a comment on the close relationship between ethical behavior and social welfare, on how the common good is served when individuals base their actions on consistent moral principles– and undermined when they act selfishly. As the Acton Institute’s Ballor put it, the cardinal is warning “about an economy that lacks participants who act from the basis of a serious and committed moral foundation,” and his comment is “about a lack of religious discipline as much as economic discipline.”

The amazing thing about what then Cardinal Ratzinger said was not that it was particularly brilliant or even “prophetic”, but that so few people today recognize the moral and ethical behavior on which our financial system rests.  It’s so obvious and apparent, yet people are so blinded in their greed, excess and sin that it has taken a serious financial collapse to drive home the point.  Everything from excessive spending to excessive demand for exorbitant returns has fueled this moral collapse.  No economic collapse can occur without an underlying moral culpability. Yet, there are lots of KoolAid drinkers out there who think there is no connection between morality and making money.  They believe that everything can be fixed by the government pumping in or pumping out money.  The focus is on the form and not the substance of the problem. In other words, we want to change the colour of the paint when the whole house is rotten and is about to collapse on our heads. 

For decades, liberals who like to pretend they are “economic conservatives” were telling social conservatives to “keep morality” out of politics.  Not only will that view turn out to be quite disastrous as we head into an Obamanation term during the next four years, but it seems that keeping morality and God out of economics hasn’t done the socially liberal “fiscal conservatives” too much good either.

In fact, ignoring the Christian, Cardinal virtues:  prudence, justice, temperance, and fortitude have placed the West in an economic free-fall completely parallel to its current moral condition.

The other thing that it has taught us — and this is a lesson for the libertarians out there — is that “freedom” cannot exist without a search for the truth.  I tried to point this out to Rob Breakenridge in my discussions with him earlier this Summer, but he didn’t listen.  This is one of the things I explained to him:

To the extent that that speech departs from THE TRUTH is the extent to which we will suffer.   Suppressing speech is tyranny. But that doesn’t mean that wild and false speech doesn’t bring its own kind of hell. It does.  If you think it doesn’t, then you are merely elevating “freedom” (licence actually) into an idol and refusing to acknowledge that speech that does not respect the boundary of truth is speech that will eventually enslave us.  This is the legal fiction that many people have failed to recognize on “our” side of the fence.  Freedom without the truth is a legal fiction. It will not sustain a civilization.  Amazingly, there was a time when Canada did not accept pornography or abortion or homosexual imperialism or even contraception.  That was before Trudeau and I should think Canadians before Trudeaupia knew and understood freedom much better than we do today.   Lord knows that that generation paid the price defending it so they should know what they are talking about. (Source)

He wanted to treat freedom as some kind of absolute virtue without acknowledging that without truth and morality, society will collapse just like our markets have.  The markets collapsed because moral restraint in lending and spending were simply not present.  It was about good times without financial or moral reality. It is not enough for us to demand our freedoms – whether they be economic or civil — if we do not also seek out and submit to the Truth.

The problems with our culture today is that we do not have a proper understanding of freedom. And that’s probably the biggest reason why the financial markets have collapsed.  It’s called the “American Dream” for a reason. Because a dream is not real.

Remember this line?  It’s the economy, stupid! 

Indeed it is, but you must be a big fool to think that morality and truth (with a capital “T”) can be ignored in managing it.

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