Mirror of Justice

A blog dedicated to the development of Catholic legal theory.
Affiliated with the Program on Church, State & Society at Notre Dame Law School.

Sunday, October 5, 2008

CST, regulation, and the two parties

Mark Stricherz's post, here, connects well with the various recent MOJ posts on the credit crisis, the economy generally, and CST.

News from the U.K.

Friday, October 3, 2008

Obama's effect on abortion

A reader who wishes to remain anonymous has put together a list of reasons why an Obama administration will increase the number of abortions.  I do not vouch for the legitimacy of every assertion (e.g., I do not believe that we should conclude much from Obama's comment about his daughters being "punished" with a child), but I pass the information along nevertheless:

Many (most notably Doug Kmiec) have made the public argument that Obama would, if elected, reduce the incidence of abortion in America.  This is false.  His record and agenda show that his election would certainly lead to the further entrenchment of right to kill unborn children in constitutional law, an increase in the number of abortions, and a massive increase in the number of embryonic human beings killed for research (to the tune of millions).  Some facts:

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Explaining the pro-life to pro-choice move

Over at the Volokh Conspiracy, there's an interesting (and civil, for the most part) set of comments from readers who have moved from pro-life to pro-choice, explaining the reasons for their switch.

A highbrow, Friday afternoon literary post

I really liked this ("Changes in the Land"), by Thomas Zebrowski, over at First Things.  It's a great reflection on the work of Wallace Stegner (if you have not read Crossing to Safety, well, cancel your weekend plans and do it).  A bit:

. . .  Stegner was on a lifelong quest for tradition, rootedness, and a sense of community that had been denied him by his peripatetic childhood and the individualistic outlook that surrounded him.

His early years in Utah had taught him about the benefits, even the necessity, of community for survival in a harsh natural environment, and Stegner recognized that it was the Mormons’ faith in God and in the future that had enabled them alone to carve out a respectable civilization in the North American desert. Wally never embraced Mormonism or any religious faith, but Fradkin believes that in a sense Stegner shared the Eastward orientation of this biblical people. The Mormons of Salt Lake City bury their dead beneath headstones that look back towards Zion. And Fradkin places much symbolic value upon the fact that Stegner chose for his own ashes to be scattered on his summer property in Greensboro, Vermont instead of near the Palo Alto home he had occupied for more than forty years. In part, Stegner’s decision may have been a testament to the comparatively stable, if flawed, local community he had discovered there. In Fradkin’s interpretation, it was also about Stegner’s belief in the greater capacity of this more verdant land to renew its own natural resources and reverse some of the grosser effects of human spoliation.

The environmental and even social perils of the West, on Stegner’s view, have been specially conditioned by an all but pervasive aridity that, among other things, freezes the effects of human exploitation into the landscape. In the more humid Eastern and Southern climes, the vertiginous wilderness is always poised to reclaim the land at least partially from human development and control. The practically necessary power plants, dams, mines, and sprawling housing developments of the West, by contrast, scar and damage the land in ways that are irreversible within any human timeframe. A New Deal Democrat who believed in the prudent use of governmental power, Stegner supported robust federal protection of the pristine wilderness areas that still remained west of the Mississippi, going so far as to invest with spiritual significance the preservation of some Western lands in a state as much unaltered by human influence as possible. He believed there were intangible and ancient resources in those places that might somehow sustain us. . . .

"Person, State, Society"

As I mentioned a month or so ago, I'm teaching a seminar at Notre Dame Law School this semester called "Catholic Social Thought: Person, State & Society".  And, I'm having a great time.  (The students?  Well, you'll have to ask them.)  A recent meeting was dedicated to subsidiarity and pluralism, and we read:  Quadragessimo anno; Thomas C. Kohler, In Praise of Little Platoons, in G. Weigel & R. Royal, eds., Building the Free Society (1993); Richard W. Garnett, Jaycees Reconsidered:  Judge Richard S. Arnold and the Freedom of Association, 58 Ark. L. Rev. 587 (2005); John A. Coleman, S.J., A Limited State and a Vibrant Society:  Christianity and Civil Society, in Post & Rosenblum, eds., Civil Society and Government (2002); and selections from the Compendium (¶¶ 406-27).

Next week, the topics are "human rights and human dignity", and we'll read (inter alia) Pacem in terris; Lorenzo Albacete, A Theological Anthropology, in Recovering Self-Evident Truths; Mary Ann Glendon, Foundations of Human Rights:  The Unfinished Business, in Recovering Self-Evident Truths; & Jacques Maritain, Man and the State.

Is this a great job, or what?  (The rest of the semester's readings can be found after the jump, if you are interested.  Comments welcome!)

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Thursday, October 2, 2008

The Obama Children's Choir Video and the Danger of Displacement of Religion With Politics

There’s been a lot of buzz on the cable news stations and the internet about a video of choir of children being led in the singing of an original song praising Obama and built on his campaign themes. Although some commentators have found the video to be cute or at least innocuous, most of the bloggers and accompanying comments have characterized it as creepy or even sinister. Once it became controversial, the Obama campaign apparently removed it from its campaign web site and YouTube. But the video has been reposted by others (after all, nothing ever truly disappears once it is up on the internet). You can judge for yourself below (assuming it hasn’t yet disappeared), if you are one of the few not yet to have seen it:

(If the video has disappeared, you can try looking here to find another copy of it.)

Some of my colleagues around the country with an historical sensitivity saw parallels to cult of personality behavior surrounding political leaders past and present of an authoritarian bent. Sharing the same perspective, commentary on the internet has often juxtaposed the Obama children’s choir video with excerpts from the film, Cabaret, in which a group of Hitler Youth sing “Tomorrow Belongs to Me,” or with a vignette of a children’s choir singing songs of adoration to Korean dictator Kim Jong Il as the “Dear Leader.” Now to the extent that anyone is suggesting that Obama is an aspiring dictator, much less that his political views are as reprehensible as these other examples, such a comparison is grossly unfair. (Nor do I think the accusations of brainwashing of children are telling here, as if the children of conservatives do not tend to adopt the perspectives of their parents as well.)

More legitimately and fairly, most of the critique suggests that the Obama campaign’s mistake in this episode lies in its tone deafness to such disturbing historical parallels, as well as reinforcement of the impression that the Obama campaign is focused primarily on personality and fails to discourage the messianic flavor of some aspects of its campaign (for more on that see here). Both impressions should have been apparent to any objective observer of the performance. Nor can the promoters of the Obama children’s choir video be excused as ignorantly exuberant. The video apparently was created by Obama’s wealthy supporters among the Hollywood entertainment industry (here). Of all people, those working in the film industry should have known better. (While the video was not produced directly by the Obama campaign, it was created by leading supporters and was, until yesterday, prominently displayed on the Obama campaign web site.)

My immediate reaction to the Obama children’s choir was a little different. When I first saw the video, it brought to my mind a religious gathering, with children singing at worship in an evangelical church or Bible camp. (Although we are Catholic and my daughter attends Catholic school, she often goes to evangelical day and week camps, where she has loved the worship, Bible study, and prayer time and comes home spiritually energized.) The parallels are almost exact: A group of children wearing identical t-shirts with a designer icon; bright and shiny young faces; an inspirational song about spreading the word, lifting up our hearts, and changing the world; choreographed hand motions, and even the ubiquitous, if often annoying, overly-enthusiastic choir director making exaggerated gestures. Of course, the crucial difference is that the devotional songs lifted up by children at an evangelical church or Bible camp are directed to our Lord and Savior – not to a political figure or political campaign.

In contrast with or addition to the other critiques being sounded, I suggest the real lesson to be drawn from this episode is a reminder to all of us, of whatever political leanings, not to allow politics to be elevated into the place of religion in our lives. Watching this video closely, including observing the presence and reaction of the parents in the audience, the viewer wonders whether this performance is the equivalent of a religious ceremony for these families (and it reportedly was filmed and recorded by Hollywood producers on a Sunday morning). Attendance at and involvement in a church or synagogue appears to have been displaced by political devotionals. Placing a political cause in such a central place is a dangerous temptation for many of us. (Now I'm not suggesting that any of us on the Mirror of Justice would be tempted to sing adoration to a political leader, but rather I know how easy it is to displace religious duties and relationships with political or professional ones).

For those of us who take a greater than ordinary interest in public, legal, and political affairs, we are constantly at the risk of losing a sense of priority, of devoting too much attention to temporal matters and placing faith in human institutions or movements or laws, while forgetting the higher things. Yes, I do think this danger is greater for those on the liberal side of the political spectrum, precisely because their political views are so heavily centered on government as a provider and on the employment of politics to achieve social justice. But politically-active conservatives are hardly immune, as we too can begin to believe that politics matters more than anything else, that patriotism trumps all else, and that the world really can be changed by a political movement rather than by a revolution of hearts.

In my published writing and previously on this blog, I have quoted a powerful reminder of priorities by Richard John Neuhaus, but it bears repeating:

Whether the political dimension is major or minor in our vocations, we will all do our work much better if we understand that we are not doing the most important thing in the world. It may be the most important thing for us to do because it is what we believe we are called to do, but not because it is the most important thing in the world. (Richard John Neuhaus, America Against Itself: Moral Vision and the Public Order 23 (1992).)

Greg Sisk


Credit Default Swaps and Speculation

Thanks to those who have have responded to my original inquiry regarding the financial crisis.  Fractional reserve banking, questionable mortgage lending practices, stewardship, and the role of regulation were some of the topics I was hoping we would address.  One issue that has not been mentioned but is perhaps the elephant in the room is the role of derivatives, and credit default swaps in particular.  Mortgage defaults and bank failures are terrible problems, but I don't believe that these alone motivated President Bush to responded with such urgency.  Credit default swaps and similar instruments have allowed corporate debt to be leveraged (perhaps ten fold), so that as corporations are unable to make payments on debt, the impact is amplified throughout the ecomony. 

A credit default swap is an agreement to exchange periodic payments for a promise to make a payout upon a specified default of payment on corporate debt.  It functions as a form of insurance except that the party promising payout is not regulated as an insurer and the purchasing party does not necessarily have an interest in the underlying debt instrument.  The result is an unregulated tradable contract that is structured like insurance but is often entered into for purely speculative purposes.  Some current estimates place the notional value of these contracts at between 50 and 60 trillion dollars (perhaps ten times the value of the corporate debt market and four times the US GDP).  While such contracts serve a valuable hedging purpose for holders of debt, they have also magnified the potential severity of the housing bubble and its effects.  A number of analysts have likened credit default swaps to gambling, something which Catholic teaching certainly speaks to.  At the very least, this problem invites discussion regarding appropriate regulation of these types of financial instruments.

20th Anniversary of Mulieris Dignitatem

I'm heading to D.C. this afternoon, not to help Congress resolve the financial crisis, but to spend a couple of days considering aspects of the "Palin effect" through a Catholic lens.  I'm participating in this conference organized by Catholic Law School & Ave Maria Law School Commemorating the 20th Anniversary of Mulieris Dignitatem:  On the Dignity and Vocation of Women.  If you'll be in the are on Friday and Saturday, stop by.  They have gathered a truly incredible collection of speakers.

Wednesday, October 1, 2008

Fractional Reserve Policy, Roman Law, and the Financial Crisis

I agree with Greg that the blame for the current financial crisis is shared equally by members of both parties, and I agree that the proper response is not a knee-jerk reaction toward MORE regulation, but rather a careful, deliberate, consideration of BETTER regulation.  But I disagree with his characterization of the belief that "our current credit crisis was caused by lax regulation generally of financial markets" as "historical revisionism."  Blaming the Republicans for that lax regulation might be historical revisionism, but I do not think there is any doubt that lack of regulation contributed significantly to the current situation.

Here's what another reader who knows much more about monetary policy (and about Roman law's position on fractional reserve banking) than I do has to add to this discussion.  He also raises a subsidiarity concern.

I think you are correct in your assessment that "the market's hunger for speculative instruments (and the profits they were seeming to generate) fueled the push to make unwise loans..." No pun intended here, but what fed the market's hunger?

If we look at money supply figures, we see that there has been a general steepening of the M3 growth curve since the Y2K fear and the 2001 terrorist attacks. While money aggregates have been shunned from the general economic discourse, I think it is a mistake to assume that they do not have a substantial economic effect.

http://www.nowandfutures.com/key_stats.html

(scroll down to "M3 plus credit, longer-term chart").

Without the massive money and credit expansion of the last 10 years, market participants would not have been able to feed their hunger for speculative instruments in the manner they have. Under Fed policy, when interest rates are lowered and money is injected into the system, the banks are the first recipients who then lend out that money throughout the economy. From there, banks in the last 10 or so years have exhibited a herd like mentality moving from tech-internet bubble in the late 90's, to the Enron-energy bubble, to the Housing bubble, ending with the Derivatives bubble. A look at Chase-Manhattan's (now JPM) financial reports over that tenor will illustrate how banks have moved within these bubbles. What we have had lately with Fed policy is a monetary permissiveness which has allowed the banking system to continue in putting off the inevitable banking corrections necessary to clean out the system and let more prudent market participants manage the assets.

Catholic Social Thought needs to look closer at the larger issues surrounding the Anglo-American method of fractional reserve central banking. If somebody has promised in trust to hold a deposit, which can be immediately demanded, are there moral-ethical issues with lending that money out? The Roman law tradition did not allow for lending to occur with a floating demand for principal (callable loans), but it did allow for lending under fixed contracts like in a CD, it seems the policy behind such a banking regime was that it led to greater stability than one of reserves fractional to demand deposits. See Jesus Huerta de Soto, Money, Bank Credit, and Economic Cycles. Also from a subsidiarity standpoint, is national central banking the best way to order banking? What about smaller central banking regimes? What about alternative methods of banking that are currently foreclosed by the US banking system (100% reserve banking)? Such questions, I think, are not being considered today in our economic discourse, but should be.