A “global political authority” and a “central world bank”: These are the solutions that the Pontifical Council for Justice and Peace recommends for the worldwide financial crisis. “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority,” the document outlining the council’s recommendations, is, in the words of author and Roman Catholic Thomas E. Woods, Jr., “deeply confused,” at once recognizing that central bank-driven inflation and easy credit are at the root of the world’s financial woes and prescribing even bigger government and more highly centralized banking as the cure.

There is some debate over the extent to which the document presents the church’s position on the matter. The council’s president, Cardinal Peter Turkson, made it clear at the press conference that launched the paper that the statement was “not in any way the opinion of the pope,” but solely of those who composed it. The council’s secretary, Bishop Mario Toso, when questioned, said the document was reviewed only by the Secretariat of State and then released; the Pope had not read it. While press accounts have often referred to it as if it were a papal pronouncement, National Review’s George Weigel insists that such attribution is “rubbish, rubbish, rubbish.” “The document is a ‘Note’ from a rather small office in the Roman Curia,” Weigel maintains, adding that it “doesn’t speak for the Pope, it doesn’t speak for ‘the Vatican,’ and it doesn’t speak for the Catholic Church.”

Woods, responding to similar criticism from a reader of his blog, argued: “I’m supposed to distinguish between the Pontifical Council and the Pope, you say. Fair enough. But did those people appoint themselves? Is Rome consistently surprised by how liberal its appointees turn out to be? Fewer and fewer people believe this anymore.” Indeed, the council’s recommendations mirror those of Pope Benedict XVI, who in a 2009 encyclical called for “a true world political authority” to, among other things, “manage the global economy.”

As noted above, the council appears to have a good grasp of the underlying cause of the present financial distress:

In recent decades, it was the banks that extended credit, which generated money, which in turn sought a further expansion of credit. In this way, the economic system was driven towards an inflationary spiral that inevitably encountered a limit in the risk that credit institutions could accept. They faced the ultimate danger of bankruptcy, with negative consequences for the entire economic and financial system….
 
Since the 1990s, we have seen that money and credit instruments worldwide have grown more rapidly than revenue, even adjusting for current prices. From this came the formation of pockets of excessive liquidity and speculative bubbles which later turned into a series of solvency and confidence crises that have spread and followed one another over the years.

As Jeffrey Tucker put it, “Some people at the Vatican have gotten the message about the dangers of the fiat money system that generates unlimited amount[s] of credit, and even traced it all to the monetary reforms of 40 years ago.” Those “reforms” were the dissolution of the Bretton Woods system and the end of the dollar’s convertibility into gold under President Richard M. Nixon, turning the dollar into a purely fiat currency to be manipulated by the Federal Reserve. “Every problem we’ve had since — inflation, bubbles, credit addiction, bank racketeering — can be traced to this one act,” Tucker avers.

The council, however, does not seem to understand that governments and their central banks were behind the inflation and credit expansion. Instead, the document blames “an economic liberalism that spurns rules and controls,” which is to say laissez-faire capitalism, and recommends even bigger, more centralized government and banking to prevent a recurrence. “This,” Woods remarks, “is a delusion, albeit a common one.”

In the United States we have 115 agencies that regulate the financial sector, and the Securities and Exchange Commission never had a bigger budget or staff than under George W. Bush. There has been a threefold (inflation-adjusted) increase in funding for financial regulation since 1980…. There is no repealed regulation that would have prevented the crisis consuming the world right now.

The banking industry is by far the least laissez-faire sector of the U.S. economy; it is a cartel arrangement overseen by the Federal Reserve and shot through with monopoly privilege, bailout protection, and moral hazard.

Having misdiagnosed the problem as too little regulation, the council then draws the faulty conclusion that it “seems obvious” that “a world political authority” is needed to prevent future economic meltdowns. The council goes on to describe its utopian vision of this global government. It “cannot be imposed by force, coercion or violence.” It must be “impartial” in its decision-making. It “should put itself at the service of the various member countries.” It should step in “only when individual, social or financial actors are intrinsically deficient in capacity, or cannot manage by themselves to do what is required of them.”

In other words, the council expects humans, given the opportunity to rule the world, to adopt selfless behavior entirely at variance with that which they display when put in charge of much smaller fiefdoms. Government, by its very nature, employs force. It is never impartial but always bends to the will of interest groups. It seeks not to serve but to be served unquestioningly. And it always finds ways to blame “market failure” or other perceived private-sector deficiencies for its continual interventions.

The document also calls for “some form of global monetary management.” “In fact,” it says, “one can see an emerging requirement for a body that will carry out the functions of a kind of ‘central world bank’ that regulates the flow and system of monetary exchanges similar to the national central banks.”

“This is beyond naïve,” observes Tucker. “It seems to illustrate a near total absence of clear thinking. Centralization of money and credit caused this problem. Centralization of political authority caused this problem. Why would anyone imagine that more centralization is therefore the answer? This approach takes a terrible situation and makes it much worse.”

Needless to say, such a governing body as the council envisions would necessarily erode the sovereignty of existing nation-states. The council suggests using the United Nations as a “reference” for setting up this world authority and is positively giddy with the thought that “this transformation will be made at the cost of a gradual, balanced transfer of a part of each nation’s powers to a world Authority and to regional Authorities.” The dangers of such a system are obvious.

“In a world on its way to rapid globalization,” the council concludes, “the reference to a world Authority becomes the only horizon compatible with the new realities of our time and the needs of humankind.” It then goes on to caution readers of the lesson of the Tower of Babel (Genesis 11:1-9), which the council claims is “how the ‘diversity’ of peoples can turn into a vehicle for selfishness and an instrument of division.”

A fairer reading of that passage would, however, indicate that the lesson is not that “diversity” is dangerous but rather that centralized power is. God, after all, caused the diversity of language specifically to frustrate a unified humanity’s attempts to set itself up as a god. Had the council drawn the correct conclusion from Scripture, it would have thought twice before recommending that humans attempt once more to usurp the Lord’s role as ruler of the Earth.

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A disillusioned Catholic said:

Catholic misguidance Once again, a Vatican council puts forth a very un-Catholic position. Actions of the Catholic church and of Catholics generally are supposed to be based on the principle of subsidiarity. As Wikipedia explains,"Functions of government, business, and other secular activities should be as local as possible. If a complex function is carried out at a local level just as effectively as on the national level, the local level should be the one to carry out the specified function." Such a belief promotes effective governance and the moral dignity of the individual. Here, because a sovereign government and banks can solve the banking malfeasance merely by repudiating fiat currency (money not backed by gold or a precious commodity) and fractional reserve banking, this is an anti-Catholic decree. The church has long acknowledged that Russia sent thousands of young men to infiltrate the church and subvert Catholic teachings because the church is historically anti-communist. I guess we know what council some of these guys ended up on.

October 26, 2011

A disillusioned Catholic said:

part two The church has also specifically repudiated socialism and labeled it immoral. If I remember correctly, this teaching is in the encyclical of Pope Leo XIII entitled Rerum Novarum. Again this decree is anti-Catholic.

October 26, 2011

sirbourbon said:

Catholic church goers are just as ignorant of economic systems as protestants, Jews and Muslims. There is no excuse to remain ignorant when America and the world has John F. McManus to save them from delusional marxist solutions and to point them back to Adam Smith the Founders and God with 2 quick presentations:Overview of America >>http://www.youtube.com/watch?v=m_boAGNPmNQ Dollars and Sense:http://www.youtube.com/watch?v=vjWNOe66udk

October 26, 2011

IronGuru777 said:

Rome gets another pass? I don't think so. Supposedly the best minds reside in Vatican City. The Pope and his watchful army of Globalists know exactly what they are saying when they remark about having a World Government Central Bank...they aren't ignorant of the facts. In order for many great minded catholics to wrap their allegiant minds around Vatican statements-they often find themselves jumping through hoops and making excuses for Vatican City's supposed mis-spoken pronouncements. Wake Up! Thankfully Almighty God: Opened my eyes-pointed my to His Holy Scripture-and pulled me out the WorldWideCult known as Romanism. Praise be to the Biblical Jesus who is the Chief Priest and Cornerstone of His true church. Read your Bibles. Timothy 1 &2. All of Hebrews...I love all Catholics and want you to know the Way the Truth and the Life...the real Biblical Jesus...not the great imposter...who immitates the True Saviour.

October 26, 2011

Heather said:

The headline for this article is misleading Here is an explanation of what is really going on...the rest of the story, if you will: http://www.catholicvote.org/di...hp?p=21986

October 26, 2011

fumata bianca said:

"cult of Romanism?" The first pope of God's church on earth was Saint Peter whom Christ charged with the duty of building His church on earth. God didn't start a cult and His apostles were not cultists. We must deal with the great deceiver, satan, whom Jesus called the murderer of murderers and father of liars. There is no denomination and no church organization that has not been influenced and infiltrated by liars and deceivers. The World Council of Churches and the National Council of Churches have "One World Order adherents influencing and misdirecting churches that belong to those organizations with false teachings. The most obvious is the embrace of homosexuality in some mainline protestant denominations. To date the official teaching of the Catholic Church still condemns homosexuality and abortion and all forms of contraception. Despite the laxity of the seminaries that allow homosexuals to enter the priesthood the church has maintained that homosexuality violates the commandments. All churches are under attack by secularism and the advocates of world government have infiltrated the major denominations. Council on Foreign Relations member Rick Warren is a prime example of a pastor belonging to a world government advocacy group, the CFR, and the leader of the Saddleback mega-church. http://www.thenewamerican.com/usne...rack-obama

October 26, 2011

Pat Henry said:

Economic war has economic solutions under God Discussions about what Rome really is and how to reform it predate Luther; even Wycliffe and the Lollards were preceded by Hus, and even the "Anabaptists" killed under Augustine. So that discussion is a long one, perhaps never ending. Meanwhile, this latest economic declaration is an outright communistic, global-centralizing solution. Revelation reveals that even as the pre-Christian Roman Empire tried to stamp out the kingdom of Jesus, it was by spiritual warfare and perseverance unto death that the true Church would survive. And it did, transforming the society of that day. FastForward to now. Fiat currency is false weights and measures, already judged by the prophets of old covenant Israel. From "the gold of Ophir" mentioned in the Garden, the solution is sound money based on trade that is fair and just (truly tit for tat). The "economy" is not money, but wealth. And wealth is not treasure, but capacity to produce useful goods from raw materials and skill in synergizing associations in a civil sphere. Naturally, then, these make money. Wisdom is also required, not only for the movers, but for those who buy what's offered. (Thus, repentance is the most fundamental way to shift an economy.) The point here is that to shift the economy, we must NOT wait for "government to do something." THAT is at the base of the symptoms we're suffering. We - as people healthy, wealthy, and wise - must build our communities (local neighbors and spheres of connections) pro-actively. But if we build our house with "cards," the next breeze will blow it down. ("Don't shake the table and ruin my illusion!") The answer is to build a sound economy, and to start with your own trade partners now. Sign up here and begin (lots of good articles to investigate), electronic transfer between holdings a secure option: http://www.goldmoney.com?gmrefcode=soundeco

October 27, 2011

Pat Henry said:

@sirbourbon Adam Smith, while obviously influential, was not at the base of the civil and (thus) economic freedoms advocated by the Founders. The Spirit of the Laws by Montesquieu was more fundamental, a framework frequently quoted. You will see Montesquieu and not Smith under the hand of George Mason in the memorial in DC (just beyond Jefferson), the author of the Virginia Declaration of Rights, essentially now our Bill of Rights. Smith, in the same error as Ayn Rand, sees the invisible hand of selfishness working for good, rather than the Providence of an interposing God operating according to revealed Law.

October 27, 2011

teresa said:

the church triumphant the catholic church is infallible with regards to dogma. when Christ instituted His church He promised that the gates of hell will not prevail against it. that being said, the church is filled with fallible men. they can and do make mistakes. take Vatican 2. bad men with evil intentions changed the Catholic church and the way we worship. they stripped the churches of their beauty, took away the latin that ensured the universality of the mass. and made the eucharist common and unimportant. the pope went along with this. it looked like the end of the church to some. how could these terrible things happen. that was in the 1960's, today the latin mass is not only allowed to be said, but encouraged. and we have a new generation of Catholics falling in love with the mass again. so the bishops and popes and priests arent perfect, they can be evil and wrong. it doesnt take away from the church. it couldnt. the church belongs to Christ. She is His. and if a vatican council opines that a world fiat currency is favorable, they're wrong, and liberal, and not consistent with the church's teaching on freedom and liberty. the end.

October 30, 2011