Vatican Assails Wall Street for Creating an “Amoral Culture”
By Pam Martens and Russ Martens: May 18, 2018 ~
The Vatican released a lengthy report yesterday on how the drive for accumulating money at any cost has turned Wall Street and much of the global financial system into an “amoral culture,” noting that the idea that markets will be self-policing is pure bunk. The Vatican has apparently decided to keep the debate alive that Senator Bernie Sanders started during the presidential campaign of 2016 when he repeatedly railed against Wall Street for having a “business model of fraud.” The Vatican’s entry into this critical conversation would be much more meaningful if each time it or the Pope lectures the world on the meaning of morality they would acknowledge the Catholic Church’s own moral failings over decades in protecting sexual predators of children, refusing to report the assaults to law enforcement and moving the predators from parish to parish — not all that dissimilar to the private justice system run by Wall Street as predator brokers move from firm to firm. (See our related article on the Pope here.)
That being said, there were some interesting and profound nuggets in both the press conference held by the Vatican to release the report and in the report itself, which was titled: “Considerations for an Ethical Discernment Regarding Some Aspects of the Present Economic-Financial System.” H.E. Msgr. Luis Francisco Ladaria Ferrer, S.J., prefect of the Congregation for the Doctrine of the Faith had this to say at the press conference:
“The purpose of these Considerations is to state clearly that, at the root of the spread of dishonest and predatory financial practices, there are first of all an anthropological myopia and a progressive crisis of the human that have been achieved. Man, today, no longer knowing who he is, and what he is doing in the world, does not even know how to act well, ending up remaining at the mercy of the convenience of the moment and of the interests that dominate the market.
“The profit of the strongest has taken over from the authentic good and has become the real dominant factor in economic and social relations. In this way, the common good has disappeared in many environments from the horizons of living, the conflict of relationships has increased and inequalities have become more pronounced.
“The strongest economic subjects have become Superstars who seize huge amounts of resources, resources that are ever less evenly distributed and increasingly concentrated in the hands of a few. It is incredible even to think that ten people may hold almost half of the world’s wealth: today this fact is now a reality!”
Little of how Wall Street fleeces the public was spared from the Vatican’s report. Likely referring to the 14 to 20 percent interest rates that Wall Street banks are allowed to charge their customers on credit cards, the report said this:
“In this sphere, it is clear that applying excessively high interest rates, really beyond the range of the borrowers of funds, represents a transaction not only ethically illegitimate, but also harmful to the health of the economic system. As always, such practices, along with usurious activities, have been recognized by human conscience as iniquitous and by the economic system as contrary to its good functioning.”
The Vatican’s assessment of the risk of derivatives was equally spot on, calling them “a ticking time bomb.” As for one segment of the derivatives market – the credit default swaps that collapsed the large U.S. insurer AIG in 2008 and required a $185 billion taxpayer bailout of the company because it was the counterparty for these instruments to every major bank on Wall Street – the report had this to say:
“A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.,
“The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
“In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.”
Dwell on that sentence for a moment or two. Does the Vatican know something that the rest of us don’t yet know? Is there another