Monday, October 06, 2008

The One Defining Truth at Stake in the Election 2008

1) Peggy Noonan senses this election is nation-defining:”

“A friend IM'd the day after Palin's speech, and I told him of an inexplicable sense of foreboding. He surprised me by saying he shared it. "Calling all underworlds reporting for duty!," he wrote. "The bed is about to fly around the room, the puke is about to come out." He meant: this campaign is going to engage unseen powers and forces. He meant: this campaign… is going to turn dark.

“It is starting to look to me like a nation-defining election.”[1]

2) There is only one truth at stake in this election: the human person as relation.

It seems that there are two zones of issue:

the financial and the abortion. In reality, the abortion is the most visible, and therefore not discussed. It is too apparent, and therefore really not debatable. It’s like debating the existence of the computer I’m typing on. It is whisked off the stage by fear appealing to vanity. The fear is: single issue. To be “single issue” is to be fundamentalist. This is the equivalency of “Luddite” (i.e. Ned Lud who was a half-wit opposing progress). The vanity is to be sufficiently broad-minded - read "Tolerant" - as not to be encumbered by absolutes.

The financial is the assumption that the human person is an animal in whom greed is constitutive. Among the very best of us, say, Robbie George, the reference to the human person is to an animal organism. He is working against homosexual relationships and argues that coitus between a man and woman is organic (as opposed to homosexual liaisons). His (and Patrick Lee’s) remark about physical complementarity is well taken, but the point that “(h)uman beings are animal organisms, albeit of a particular type,”[2] gives away with one hand what it is trying to gain with the other.

Leaving that aside, I find that the universal semantics on economics offer an across-the-board assessment of the human person as driven indesinenter by greed. It is a given. As Michael Douglas, starring as banker Gordon Gekko in Oliver Stone’s “Wall Street” announces: “Greed is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.”

The presumption is that there is no check on one’s greed as the inexorable inflation of the self except the greed of the other. Hence, there is no personal ethic. There is to be no mastery of the self by the self. There is no freedom not to be greedy. That is impossible in the organism to which the human person has been dumbed down. The Wall Street Journal announces:Yes, greed is ever with us, at least until Washington transforms human nature. The wizards of Wall Street and London became ever more inventive in finding ways to sell mortgages and finance housing."[3]

A Little History: Lewis Ranieri

And here it would be most illuminating to study the history of Lewis Ranieri at Salomon Brothers in the early eighties. Suffice it to quote the opening paragraph of the chapter “The Fat Men and Their Marvelous Money Machine” (103) in Michael Lewis’s “Liar’s Poker” (103 ->)

" Lights began to flash on the mortgage trading desk in October 1981, and at first no one knew why. On the other end of the telephones were nervous savings and loan presidents from across America wanting to speak to a Salomon mortgage trader. They were desperate to sell their loans. Every home mortgage in America, one trillion dollars’ worth of debt, seemed to be for sale, There were a thousand sellers, and no buyers. Correction. One buyer. Lewie Ranieri and his traders. The force of the imbalance between supply and demand was stunning. It was as if a fire hydrant burst directly upon a group of thirsty street urchins. One trillion dollars cam barreling through the phone lines, and all the traders had to do was open their mouths and swallow as much as they could.”

Ranieri at Salomon Brothers did what no one else dared to do. He bought the home loans without certainty of repayment, found out that they had to be approved by the “Federal Housing Administration,” went out and got that approval and turned the loans (mortgages) into government-backed bonds. “Then they could sell the bonds to Salomon’s institutional investors as, in effect, U.S. government bonds. For that purpose, partly as the result of Ranieri’s persistent lobbying, two new facilities had sprung up in the federal government alongside Ginnie Mae. They guaranteed the mortgages that did not qualify for the Ginnie Mae stamp. The Federal Home Loan Mortgage Corporation (called Freddie Mac) and the Federal National Mortgage Association (called Fannie Mae) between them, by giving their guarantees, were able t o transform most homes mortgages into government-backed bonds. The thrifts paid a fee to have their mortgages guaranteed. The shakier the loans, the larger the fee a thrift had to pay to get its mortgages stamped by one of the agencies. Once they were stamped, however, nobody cared about the quality of the loans. Defeating homeowners became the government’s problem.”

And, it is at the point that the human person disappears from the stage. The entire trillion $ market of home loans ceases to be a personal relationship with a banking representative and becomes a “thing” for which there is no personal accountability, and no one to demand it. It becomes a give-away program which rots the moral fiber of the person as a receiver, but not a giver. The gift value of the economy – as powerfully presented in Lewis Hyde’s “The Gift” – is destroyed because there is a destruction of the human person as free moral agent, i.e. as a relation responsible vis a vis another.

Let me hasten to add that the alternative to this is not a centralized controlled economy. That is exactly what must come on the heels of the above situation if it continues to be understood in terms of uncontrolled greed, but now where the competing egoisms default and there is no balance. The alternative and antidote to this poisonous situation is the working person where the restraint must come from within as moral dimension. That lacking, the U.S. economy calling itself capitalism will be indistinguishable from a totalitarian economy calling itself socialist or communist.

Ratzinger’s Assessment

I offer Cardinal Ratzinger’s assessment of Adam Smith’s laissez-faire economy that champions self-interest, the division of labor, the function of markets, ‘the invisible hand’ of divine Providence, etc. Ratzinger wrote that Smith’s “position holds that the market is incompatible with ethics because voluntary ‘moral’ actions contradict market rules and drive the moralizing entrepreneur out of the game. For a long time, then, business ethics rang like hollow metal because the economy was held to work on efficiency and not on morality.4 The market's inner logic should free us precisely from the necessity of having to depend on the morality of its participants. The true play of market laws best guarantees progress and even distributive justice.” Ratzinger’s basic critique of Smith’s dictum is “the presence of a concealed ‘determinism.’” He continues: “The great successes of this theory concealed its limitations for a long time. But now in a changed situation, its tacit philosophical presuppositions and thus its problems become clearer. Although this position admits the freedom of individual businessmen, and to that extent can be called liberal, it is in fact deterministic [my underline] in this core. It presupposes that the free play of market forces can operate in one direction only, given the constitution of man and the world, namely, toward the self-regulation of supply and demand, and toward economic efficiency and progress.”[4] He goes on: “This determinism, in which man is completely controlled by the binding laws of the market while believing he acts in freedom from them, includes yet another and perhaps even more astounding presupposition, namely, that the natural laws of the market are in essence good (if I may be permitted so to speak) and necessarily work for the good, whatever may be true of the morality of individuals. These two presuppositions are not entirely false, [because they contain the profound truth of the free self-determination of the person as imaging God], as the successes of the market economy illustrate. But neither are they universally applicable and correct, as is evident in the problems of today’s world economy. {This was delivered in 1985, some four years before the economic and political collapse of the Soviet Union].

But, economics is a human act, and as such, it must conform to the reality of the human person who is not reducible to an organism whose constitutive drive is greed. Made in the image of God, the basic ontological drive in man, damaged but not destroyed by sin, is Love as service to God and others. Thus, Ratzinger went on: “‘The economy is governed not only by economic laws, but is also determined by men…’ Even if the market economy does rest on the ordering of the individual within a determinate network of rules, it cannot make man superfluous or exclude his moral freedom from the world of economics. It is becoming ever so clear that the development of the world economy has also to do with the development of the world community and with the universal family of man, and that the development of the spiritual powers of mankind is essential in the development of the world community. These spiritual powers are themselves a factor in the economy: the market rules function only when a moral consensus exists and sustains them.”

Ratzinger then turns to consider “the tensions between a purely liberal model of the economy and ethical considerations.” He says that “the inherent inequality of various individual economic zones [not only within a national economy but also between hemispheric economies such as North and South] endangers the free play of the market, attempts at restoring the balance have been made since the 1950s by means of development projects. It can no longer be overlooked that these attempts have failed and have even intensified the existing inequality. The result is that abroad sectors of the Third Word, which at first looked forward to development aid with great hopes, now identify the ground of their misery in the market economy, which they see as a system of exploitations, as institutionalized sin and injustice. For them, the centralized economy appears to be the moral alternative, toward which one turns with directly religious fervor…”[6]

Ratzinger then goes to his point: “For while the market economy rests on the beneficial effect of egoism and its automatic limitation through competing egoisms, the thought of just control seems to predominate in the centralized economy, where the goal is equal rights for all and proportionate distribution of goods to all.”

Is this not uncannily close to the situation we are in at this critical moment in the United States at this election time?

[1] “A Servant's Heart” – WSJ, September 6, 2008, A 11.

[2] Patrick Lee and Robert P. George, “”Quaestio Disputata – What Male-Fremale Complementarity Makes Possible: Marriage as a Two-In-One Flesh Union,” Theological Studies 69 (2008) 647.
[3] WSJ, September 22, 2008.
[4] Ibid.

[6] Ibid.
[7] Ibid.

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