The Pope Resigns After All

With the sudden, surprise announcement of the Pope resigning, I thought it would be worthwhile to revisit a previous posting of mine from almost 3 years ago, Will the Pope Resign? which I hope you will check out.

Back then, despite this not happening for almost 600 years, I was convinced that he would eventually resign because of the ever increasing toll that the child molesting scandals have taken on the church.  Of particular interest to me was the paragraph near the end of the posting on how the legal bookmakers with their ever shortening odds really thought it could happen.  Although the link on the current odds of the Pope resigning is no longer there, at the time of this posting, there are still a number of other categories under the amusing heading of “Pope Betting” such as on the future Pope’s papal name, age, and even how long it will take to pick a successor.

But I thought that it would happen sooner than 3 years later.  If you look in the previous posting, you will find plenty to support that the former Cardinal Ratzinger had his fingerprints all over the ongoing scandal.  So why now and not back then?  While at this time, we don’t know, I have my own guess on this that I would like to share with you.

A few nights ago, I decided to watch the recently debuted HBO documentary, Mea Maxima Culpa: Silence in the House of God which at the time of this posting is available on-demand to HBO subscribers.  It is incredibly compelling viewing no matter what one's faith (or lack of faith) is.

The main story focuses on some now middle-aged deaf men with both sadness and anger, recounting their days when they were molested by Lawrence Murphy, a charismatic Milwaukee priest who was in charge of their school.   Even more despicable, according to the movie, deaf children were a favorite target of molesters since they couldn’t hear the priest approaching them.  In addition, the priests knew it was especially difficult for these children to communicate with their parents about their situation, especially the ones who were not fluent in American Sign Language, the way these children are taught to communicate.

But the online synopsis has this incredible double-barreled indictment of both Benedict XVI and his predecessor, John Paul II. 

In addition to the Murphy case, MEA MAXIMA CULPA: SILENCE IN THE HOUSE OF GOD spotlights similar sex abuse cases in Ireland and Italy, and highlights the horrific actions of Marcial Maciel Degollado, a prominent church fundraiser and ruthless sex criminal beloved by Pope John Paul II. The film also reveals that in 2001, Cardinal Ratzinger – now His Holiness, Benedict the 16th – ordered that every sex abuse case involving a minor come through his desk, essentially establishing him as the most knowledgeable person in the world regarding priestly sexual abuse of minors.

While there has been more than ample ‘smoking gun’ evidence about the Pope’s involvement in the scandal, this documentary reveals documents from some of the secret Vatican archives that points the finger squarely at the Pope.

Although the film debuted in September, 2012 and had a limited release this November (which the Vatican must have surely viewed), the recent release on HBO is exposing this to a much larger audience.  And if other more mainstream media outlets follow-up on this story, the Pope’s situation at the top could well have become untenable – and thus the real reason why I think he decided to resign now.

So what now?  Some interesting questions remain.  The Pope has been immune from lawsuits since the Vatican is a sovereign state separate from Italy (something the documentary asserts was a cozy arrangement between Mussolini and the Vatican.)   So if he is no longer Pope and lives outside the Vatican, even temporarily, is he then vulnerable to lawsuits or maybe even prosecution?

And will he make some changes in the church during his last days in power to perhaps someday help divorce it once and for all from this scandal?  A recent NYT op-ed The Pope Can Still Right the Wrongs suggests that the Pope should force out the dean of the College of Cardinals “the man who, more than any other, embodies the misuse of power that has corrupted the church hierarchy.”

But more important, a release of all of the secret Vatican documents pertaining to all of the molestation complaints through the years would be a powerful disinfectant that would help clear the air.  Yes, there is still some denial by some over all of this.  But that will never completely go away.   And there have been some apologies by the church and in some cases by the Pope personally.  But to many, these apologies ring hollow because they focus more on the anger over those doing the terrible wrongs instead of the young victims whose lives have been scarred or even ruined.  More than anything else, this is about them!

It's About the Jobs

The New York Times wrote that President Obama’s second Inaugural Address Speech Reveals an Evolved and Unapologetic President.  Indeed it did.  Instead of his usual words that have been conscientiously chosen to appeal to a centrist audience without coming across as too liberal, this speech had a lot of red meat to appeal to liberals. 

Included were references to gay rights, climate change, and the growing gap between the haves and have-nots as eloquently stated in his address. 

For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class.

But what about jobs?  Or more specifically, the lack of them.  There are so many priorities that beg for the president’s attention.  Making things worse is that he only has a limited time to accomplish his goals before his lame duck status makes any progress even harder to come by.  As laudable as the other issues to address are, I believe that unemployment should be at the top of the list and not just something that was remarked about in passing in the address.

In President Obama’s first term, he spent most of his political capital on reforming health care.  There are many who second guessed him saying that the emphasis should have been on jobs,  jobs, and jobs.  But not me.  For as important as jobs are, tens of millions in the US were without health insurance, and tens of thousands each year were dying from lack of health insurance, despite Mitt Romney's ignorance on the subject.      

Fortunately, Obamacare was passed to help address this crisis. But it’s far from perfect.  For many on the left, it was a half-assed compromise to appease the private health insurance industry.  Instead of the for-profit insurance industry sucking money out of the health care system, the so-called “single payer” or “Medicare for all” system successfully used by most of the industrialized world would result in more efficiency and since health care costs are driving much of the deficit, would help to reduce it.

But back to our lack of jobs crisis.  And make no mistake about it – it is a crisis!  Back when the unemployment rate was around 10%, everybody was concerned about it.  When it got down to near 8%, there was some relief but the Republicans made an issue about it being continuously over 8% under President Obama.  But when it slipped just under 8%, the Republicans lost an issue to contest and the Democrats could assure everybody that we were in a recovery.  So it seems that nobody in charge really cares anymore.

But there are so many people who are still really hurting!  It’s easy to say that we are recovering because of the relatively lower unemployment rate.  But most people agree that the numbers underestimate the suffering that’s going on.  Those who cannot find full time work but have accepted part time work along with those who have accepted jobs that pay far less than their previous jobs aren’t counted among the unemployed.  And neither are those who have dropped out of the job market because they gave up looking.

What really distracts us from trying to solve this crisis is the insistence by some that there are indeed plenty of jobs and if enough people would just get an adequate education they would then find work.  One of the biggest offenders in my mind is NYT op-ed columnist Thomas Friedman with this from his latest column which to his detractors, seems to be a recycling of his same tired ideas on what ails the economy and what to do about it.

How to adapt? It will require more individual initiative. We know that it will be vital to have more of the “right” education than less, that you will need to develop skills that are complementary to technology rather than ones that can be easily replaced by it and that we need everyone to be innovating new products and services to employ the people who are being liberated from routine work by automation and software. The winners won’t just be those with more I.Q. It will also be those with more P.Q. (passion quotient) and C.Q. (curiosity quotient) to leverage all the new digital tools to not just find a job, but to invent one or reinvent one, and to not just learn but to relearn for a lifetime.

Liberal economist Dean Baker offered this rebuttal to Friedman.

Yeah, it would be great if people had more passion, curiosity and learned more, but it’s not clear that this would affect wages much for the 14.9 million people working in retail, the 10 million people employed in restaurants and the 1.8 million employed in hotels. In other words, even in Friedman’s hyper connected world, a very high percentage of jobs still do not offer many opportunities for passion, curiosity, and learning. 

But even ignoring the most obvious argument that not all of us can be above average, if there are so many jobs that go wanting because there aren't enough of us with the “right” education, why aren't wages rising instead of going down or stagnating? It stands to reason that if wages and job opportunities increase in a particular sector, this will attract more students to fill the slack.  On the other hand, if wages and job opportunities are decreasing, fewer students will be attracted which is what is happening now with law schools.

Indeed many young college graduates are finding out the hard way that a degree can often be a ticket to longtime crushing debt from student loans because of a lack of professional jobs that earn enough of a salary to enable entry into the middle class. And student loans are not dischargeable through bankruptcy.

The problem is that there simply aren't enough jobs for qualified people who want them.  And while there are other causes like outsourcing and automation, most economists feel that the main cause of the job shortage is simply a lack of consumer demand for products and services.  If companies already have the manpower and capacity to meet all of their present (reduced) level of demand, why would it make any sense at all for them to hire and expand?  

What makes things scary is that this can all feed on itself to make things progressively worse.  Lack of consumer demand leads to more layoffs – which leads to less demand because fewer people have money to spend.  Liberal economist Paul Krugman likes to make the point that “Your spending is my income and my spending is your income.”  So if everybody stops spending at the same time, the economy grinds to a halt.

If one accepts the above, then the question is one of how to revive demand (spending) to get the economy moving again and people working.  Keynesian economic theory (which is considered to be mainstream except by those on the hard right) says that government can and must provide the missing demand by additional government spending on things we need anyway like infrastructure improvements.  These so-called stimulus programs have been used by presidents of both parties when a slow performing economy demanded it.  The money pumped into the economy creates work along with paychecks that are used to spend money that creates demand for other products and in the process, more jobs.

And this theory has been shown to work in practice.  When President Obama inherited an economy in free fall that was shedding a massive number of jobs, he resorted to a stimulus that a consensus of economists agreed saved us from a second Great Depression.  And when speaking of the first Great Depression, it was a massive increase in government spending to fight WWII that brought us out of that.

The only real problem with all of this is that it is counter intuitive.  Increased government spending while already running a deficit seems like the wrong way out.  After all, if we run our home budgets through deficit spending for too long of a time, we would eventually go under.  But a government economy is far different than a home budget since it can borrow or print money to temporarily finance its deficits until the economy recovers.   (This is a huge advantage that the US has over a struggling country like Greece that cannot print money since it is on the euro instead of its own currency.)

But won’t all of this bring about inflation?  In a healthy economy, pumping in all of this extra money would result in too many dollars chasing too few goods which raises prices – that’s inflation.  But in this sick economy, the problem is the opposite one – not enough dollars are chasing the amount of goods we are already producing.  So the economy cannot produce enough jobs to employ everybody without some spending help from the government to create more demand.

But just as important, the converse is also true – cutting government spending (austerity) in a sick economy eliminates jobs which in turn creates more unemployment.  More unemployment means fewer tax receipts which usually makes a deficit worse!  So while there are plenty of examples of how government stimulus helps economies, the experience with austerity in Europe has been miserable as described in this NYT Paul Krugman op-ed.

So unfortunately, the discussion between the president and Congress is not about addressing unemployment by appropriately increasing government spending, but is instead about how much and where to cut government spending to try and balance the budget – which will only make unemployment worse like what has happened in Europe.

A long term shortage of jobs has been disastrous for so many people. Not being able to find a job that pays the bills not only creates financial hardship but is a tremendous waste of talent that could be put to beneficial use.  In addition, a shortage of jobs creates a lot of downward pressure on the wages of those who are employed.  With so little worker leverage over wages, it is no wonder that most of the productivity gains have resulted in much more wealth for those at the top of the economic food chain – while at the same time US poverty rates continue to climb. 

Perhaps most important, education has always been the most reliable path to upward mobility.  But if there aren't enough jobs for everybody, more education (assuming it is affordable) often just doesn't provide the same opportunities for the have-nots to escape their lot in life.  So much for the land of opportunity.

Before concluding, I wanted to suggest another effective way to increase demand in our economy.  Many of our problems are also the result of a so-called housing bubble that when if finally burst, put many homeowners in desperate financial straits – some being "underwater" which means that they owe more on their mortgages than what the home is currently worth.  Needless to say, these people are unable to contribute much demand to our economy. 

If the government were to force the banks to renegotiate the principal on these loans with an incentive that allows the banks to share in any appreciation of the house, these people would then be able to live more normal lives and help stimulate the economy by their added demand for goods and services.  If we were willing to bail out the banks that caused a lot of this mess to begin with so they could continue to pay out their large bonuses, why not also help the homeowners in need?

So the big negotiations over what spending will be cut to try and satisfy incessant demands for a balanced budget are coming up soon.  We can only hope that the president and his allies in Congress will see the light and conclude like Paul Krugman does in his op-ed:

It’s time to put the deficit obsession aside and get back to dealing with the real problem -  namely, unacceptably high unemployment.

Indeed, it really is about the jobs!