A paralyzing global credit crunch, massive layoffs, fears of overzealous government regulation -- as if the world's bankers didn't have enough to worry about, now the Vatican is preaching against them.This week, the Vatican fired not one but two volleys of criticism against the global financial system.
On Sunday, in a story that seems to have been reported only in the UK, an official Vatican policy paper lambasted the role of "offshore [banking] centres" and tax havens in promoting "imprudent economic and financial practices" around the world.
The Vatican also blamed offshore banks for "allowing a gigantic flight of capital [from poor countries] linked to tax evasion."
The Vatican's criticism comes as the world's offshore banks nervously prepare for the day President-elect Obama assumes office.
The incoming Democratic administration is not expected to be friendly to the offshore banks' secrecy-heavy business model.
As the Financial Times points out, the tax havens couldn't have been very happy when Obama blasted them on the campaign trail.
Here's the line that made the tax havens start sweating, according to the FT:
'"There's a building in the Cayman Islands that houses supposedly 12,000 U.S.-based corporations,' [Obama] said. 'That's either the biggest building in the world or the biggest tax scam in the world, and we know which one it is.'"
On Monday, the Vatican took another swipe at the global banking sector, blaming the current economic crisis on a "system of financial dealings – both national and global – based upon very short-term thinking."
The ongoing world-wide financial turmoil, a Vatican statement said, demonstrates "how financial activity can at times be completely turned in on itself, lacking any long-term consideration of the common good."
These criticisms of the global financial system aside, the Vatican isn't ready to throw in with the Naomi Kleins and Ralph Naders of the world just yet.
In fact, the Monday statement by the Vatican included a passage where the Holy See explicitly distanced itself from the more radical voices we've been hearing as the credit crisis has worsened.
How?
By condemning as an "illusion" the idea that "a policy of mere redistribution of existing wealth can definitively resolve" the issue of poverty.
The Vatican's point about the false equality created by efforts to redistribute wealth is well taken -- that path has been tried before and never works.
This raises a question -- where does the Vatican stand on the ever-growing tidal wave of bailouts announced by governments (and funded by taxpayers)?
Would these qualify, in the Holy See's view, as another kind of wealth redistribution, also destined to fail to accomplish its objective?
Considering the Vatican's apparent growing interest in the credit crunch, perhaps we should expect a declaration on this issue soon.
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(Source: NP)