The National Catholic Review
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Moral Hazard

Jamie Dimon, the chairman and chief operating officer of JPMorgan Chase, has a reputation as one of the brightest and most articulate of Wall Street bankers. He has also been one of the fiercest opponents of increased regulation of the banking sector following the Wall Street collapse of 2008. In mid-May he confessed a $2 billion loss in derivative trading by the bank’s London office and predicted the losses “could double within the next few quarters.” Perhaps the most disturbing aspect of this latest Wall Street drama is that Mr. Dimon and other major players at JPMorgan seem unable to explain precisely how the losses occurred.

The accounts, Mr. Dimon acknowledged, were badly managed and poorly supervised, but he failed to note that the losses came from a product that insures trades in other securities, similar to those that produced the financial crisis. He did admit, however, that the timing of the loss was a gift to the proponents of regulation. We agree.

That four years after the Wall Street debacle, the chairman of a leading bank that escaped the crisis unscathed could admit to trades that were “stupid” and “sloppy” is a clear sign that self-regulation in today’s massive, computer-driven markets is insufficient. The need for tougher, not weaker, regulation is clear. Only a Dodd-Frank Act on steroids, including a fully empowered Volcker Rule ban on proprietary trading by commercial banks, will reinstate the common-sense controls lost in the ill-advised 1999 repeal of the Glass-Steagall Act. To be effective, these must be backed by adequate staffing and funding for regulators. It is apparent that bankers still need to be protected from themselves, and U.S. taxpayers deserve to be protected from another costly bail out.

The Price Is Not Right

The educational debt burden shouldered by U.S. college students finally may have caught the nation’s attention. Student loan debt, at more than $1 trillion, has surpassed credit card debt in size. And the high rate of default among student borrowers is rising. A less obvious factor is the growing number of for-profit colleges, which enroll 11 percent of college students. These students receive a quarter of federal college loans, yet many drop out of college with debt but no degree. Consequently, they default at a much higher rate than graduates. Congressional bills that would tie the availability of federal student loans to a college’s own graduation rate and/or student loan default rate ought to be passed for the sake of student borrowers and taxpayers alike. Still, the issue of student debt touches something deeper than the staggering sum owed.

The bottom line is not merely financial. Rather, U.S. society must decide a question of values: Is an affordable college education for qualified applicants a national priority? Only an educated society can compete globally or play a leading role on the world stage. If affordable education is not a priority, then state and local governments will continue to pass the burden to their colleges, which will pass it on to their students. Already state and local government spending per college student is lower than it has been for the last 25 years. If affordable education is a priority, however, then citizens will have to elect leaders who support public colleges students can afford.

A Yes to Dialogue

Pope Benedict XVI has put a priority on dialogue with the unbelieving world. For that reason, he expanded the Pontifical Council for Culture with an initiative, called The Court of the Gentiles, to improve communication between believers and nonbelievers, which is often impaired, in his words, by “mutual ignorance, skepticism or indifference.” To lead that dialogue, he appointed Cardinal Gianfranco Ravasi, whose leadership has met with widespread praise. When critics challenged the inclusion of nonbelievers in the interreligious witness to peace in Assisi last fall, the cardinal defended Pope Benedict XVI’s initiative as “an attempt to reassert the importance of the relationship of faith and reason.”

When controversies broke out lately over invitations by the Pontifical Academy for Life and the Council for Culture to scientists whose research, especially on stem cells, was thought to contravene Catholic teaching, the cardinal rose to give a vigorous defense of dialogue with the church’s ideological opponents. “It’s a shaky or fundamentalist grasp of faith that sparks suspicion or fear of the other,” Catholic News Service reported the cardinal saying. “When you are well formed, you can listen to other people’s reasons,” he added. Solid, serious catechesis is compatible with respectful dialogue.

At a time when it seems that rote repetition of catechetical formulae is more and more expected of even the most educated Catholics, the cardinal’s openness to dialogue and his trust in Catholics of mature faith and learning to carry on such dialogue are reassuring. In the modern world, the scandal is not that Vatican officials would engage scientists who disagree with church teaching, but rather that such engagement is regarded as taboo.

Comments

2073113 | 6/13/2012 - 3:38pm
The Price Is Not Right

"Student loan debt, at more than $1 trillion, has surpassed credit card debt in size. And the high rate of default among student borrowers is rising. ... many drop out of college with debt but no degree."

The problem here is twofold: first, the idea that "college is for everyone", second, giving student loans to people unlikely to pay them back.  This is much like the government-mandated "home loans for everyone", which was a major contributor to the housing market collapse.

College is not for everyone - or rather, everyone is not for college.  A contributing factor is that high school is now irrlevant.  It used to be a sign that the graduate was ready for the work force, but now, because of grade inflation, automatic promotion, and high dropout rates, a high school diploma is meaningless.  Unfortunately, we seem to be seeing the same thing with college degrees.

That some institutions - such a s Harvard - are sitting on billions of dollars in cash, and that their presidents are expected to be fund-raisers first, and administrators second, does not help public perception.

I appreciate Sophie Weiss's remarks about federal regulations.  They have added significantly to the cost of doing business in every sector, at every level.  The easiest way to strangle an economy is to fetter it with layers of onerous regulation.  One wonders how Harvard ever made it from 1636 to the turn of the 20th century without federal regulation.


Yes to dialogue

One gets the idea that the Vatican's idea of "dialogue" is "We talk, you listen".    Obviously, there are creeds, articles of faith, and interpretations by the magisterium that the faithful must either accept or look elsewhere, but  the hierarchy should consider that not everything is black or white.  There are many grey areas that are not absolute articles of faith.  (I'm in no position to try to identify any.)

But as far as religious orders go, you know going in what the Rules are, and you're free to "pass";  once in, though - once the vows have been taken, you're duty-bound and honor-bound to abide by the decisions of your superiors.







Dan Hannula | 6/2/2012 - 6:14pm
Deacon Killoren-please.  When I engaged in intercollegiate debate (at my Jesuit alma mater), I was required to provide some specific support for general statements.  Really-a third of university budgets pays for regulatory compliance? Some specifics please. Professors spend 40% of their time on paperwork?-you mean regulatory paperwork?  Come on, really? $100 Million on a computer system "just" for regulatory compliance?

"Complying with federal regulations is a "huge factor" in the increasing costs of university education." (Emphasis mine.)  That's a serious statement you make-it requires some real evidence.  After a quick look on line at a GAO report and the Dept of education-I can only come up with 0.02% not you 33.33%.  But, the burden is really on you not me.  
Dan Hannula | 6/2/2012 - 6:14pm
Deacon Killoren-please.  When I engaged in intercollegiate debate (at my Jesuit alma mater), I was required to provide some specific support for general statements.  Really-a third of university budgets pays for regulatory compliance? Some specifics please. Professors spend 40% of their time on paperwork?-you mean regulatory paperwork?  Come on, really? $100 Million on a computer system "just" for regulatory compliance?

"Complying with federal regulations is a "huge factor" in the increasing costs of university education." (Emphasis mine.)  That's a serious statement you make-it requires some real evidence.  After a quick look on line at a GAO report and the Dept of education-I can only come up with 0.02% not you 33.33%.  But, the burden is really on you not me.  
JIM MCCREA | 6/1/2012 - 5:56pm
There is an persuasive theological argument for the Eucharist being a primary sacrament for the forgiveness of sins.

In the Mass we frequently ask for forgiveness: in the Penitential Rite, the Gloria, the Lord’s Prayer, the Lamb of God. At the very heart of the Eucharist, Jesus is quoted as saying at the Last Supper: “Drink from it, all of you, for this is my blood of the covenant, which will be shed on behalf of many for the forgiveness of sins” (Mt 20:28).

Eminent theologians have argued these words from Matthew’s Gospel were included in the Eucharistic Prayer by the early Church to remind us that when we celebrate the Eucharist with sincerity, our sins are forgiven.

For Matthew, “the forgiveness of sins” was a primary purpose of the Eucharist. (Eugene LaVerdiere SSS, “The Eucharist in the New Testament and the Early Church,” The Liturgical Press, 1996, p.66)

The doctrine of the remission of sins conferred by the Eucharist has had a long and varied history of use and neglect in the Church. Granted that the forgiveness of sins is not the chief object of the Eucharist — Christ made the forgiveness of sins an essential dimension of it. (John Quinn, SJ, Worship, Vol. 42, No.5 1968).

The Council of Trent (1545-1563) made the following statement, which sounds very foreign to today’s Catholic ears: “The holy Council teaches that this [Mass] is truly propitiatory and has this effect that if, contrite and penitent, with sincere heart and upright faith, with fear and reverence, we draw nigh to God, ‘we obtain mercy and find grace in seasonable aid’ (Heb 4:16). For, appeased by this sacrifice, the Lord grants the grace and gift of penitence and pardons even the gravest crimes and sins.” (Cited in W. Bausch, “A New Look at the Sacraments,” Twenty-Third Publications 1977, p.157.)

Catholicism has a rich history of Eucharistic theology that supports a different approach to the emphasis on the necessity of confessing to a priest for one’s sins to be forgiven.

Michael Cassidy | 5/29/2012 - 2:10pm
Re: Virginia Edman's comment: 
Ms. Edman has begun to connect the dots about confession.  Humanae Vitae was certainly a major factor, but I've not heard anyone speak openly about the further corrosive effect of the pedophilia/sexual abuse crisis.  It all comes down to "whom can we trust?" 

      The fall-off in confession is not restricted to the Roman Church, but other churches have approached the decline more creatively than we, recognizing (as we do, in theory) that the Eucharist itself is the source of forgiveness for our sins ("Christ died for our sins").  The Armenian Apostolic Church (and Armenia is the oldest Christian nation), for instance, utilizes a generalized form of public confession during the Divine Liturgy, and the priest pronounces sacramental absolution.  This is a form of the sacrament recognized, if not exactly heartily endorsed, by Rome.  Notwithstanding that Bishop Morris of Australia, and others, may have gotten into difficulty for endorsing it, this is a legitimate form of the sacrament.  The Assyrian, Syriac, and Coptic liturgies, among others, have done it for centuries.  With a bit more imagination, we could embrace it too.  

     Perhaps this form of the sacrament lacks certain characteristics of the form we inherited from the Irish monks of long ago, but there may be a question of priorities involved. 
Michael Cassidy | 5/29/2012 - 1:53pm
A Yes to Dialogue

     By all means!  But, as others have eloquently pointed out, that 'yes' doesn't seem to apply within the Church.  Rome must very soon begin to realize that they cannot have it both ways:  They cannot treat ordinary Catholics, or other Christians, in the way they habitually do, and then expect others to believe in their sincerity when they call for dialogue.  Whatever happened to, "Look at the Christians! See how they love one another!"?? 

     Examples can be multiplied.  The latest "translation" of the liturgy has been mentioned.  It seems demonic to me that Rome has figured out a way to disrupt the most precious part of our spiritual life, the Eucharist.  Even apart from the jarring language, every Gloria and Credo reminds us of the perfidy of Rome toward our ecumenical partners who so generously agreed to use common texts with us for these prayers.   It's not as though they weren't warned or advised.  The "What If We Just Said Wait" website got more than 23,000 signers, for example; but Rome ignored all dissent, all advice contrary to their plan.

The assault on LCWR and its member congregations is also wearing on us.  If the bishops, God forbid, take the low road and attempt to alienate the Sisters' property or funds, it will be pretty much "all over" for them.  Outrage among the laity will be overwhelming; and the bishops will soon find themselves in court, where they will lose.  But by then, the damage will have been done.  No winners. 

     And then there's "the butler did it":  Another example of killing the messenger while ignoring the message.  It's just like the pedophilia mess; for Rome, it's all about the image of the Church.  They just cannot seem to "get" that image is based upon reality.  If they want to have a good image, they have to eliminate the bad realities that lie underneath the  bad image.  Among other things, that means treating people, and groups, decently.  It also means changing structures and procedures within the Vatican and within the Church to prevent untoward things from happening in the future, so far as humanly possible.  We need a new decision-making structure, among other things.

     I don't suppose he's got a snowball's chance in hell, but maybe Cardinal Ravasi would make a good candidate for the next Pope?  We could use a lot more openness and dialogue.
ROBERT KILLOREN | 5/28/2012 - 10:42am
Complying with federal regulations is a huge factor in the increasing costs of university education. Up to a third of a university's budget results from paying the cost of professional staff and other resources to maintain regulatory compliance. Some estimates show that up to 40% of a professor's time is spent on paperwork. A number of the schools with the highest tuition rates have spent more than $100 million each purchasing monstrous computer systems that can manage the complexity of government accountability on things like student loans, student health, and student records. The schools with medical schools have all those rules plus all the paperwork associated with Medicare and HIPAA requirements. Maybe we do need all those regulations, but we have to realize that somebody has to pay for them. Oh, and then there is big time college sports that we need to leave for another time.
Anne Chapman | 5/26/2012 - 11:45am
Far easier for the pope to "dialogue" with non-believers than with the 99% who are the church. There, he asks for unquestioning assent and blind obedience.
Virginia Edman | 5/25/2012 - 11:08pm
Ah Humanae Vitae, ah settled teaching, ah natural law on contraception, where is the dialogue?  Can Benedict XVI have a dialogue with anyone?  The dissenters are everywhere, throughout the church and the world.  Women everywhere are practicing birth control.  Small families or no children at all is common now.  Fundamentalism is cracking and the people are speaking.

In my parish people voted with their feet to stop going to confession.  The priests threatened, they pleaded.  There was no response.  Now they look a little defeated and still they take each opportunity to inform the captive audiience on Sunday that they are miserable sinners.  The "rote repetition of catechetical formulas" is replaced by cunning and dark insinuation.  Just when you relax and think you are back in post Vatican II days, the trouble begins again.  Now it is a new English translation of the Roman Missal to bug you from beginning to end of the Mass, and if that is not enough the Gloria is sung only by the choir because it is too complex for the ordinary lay person to sing.

Does this  Pope really want a smaller church, more orthodox and without dissent?  All he has to do is wear down the congregation with trivia and catechetical formulas, and then to top it all off, make the congregation an audience rather than participitants.
LEONARD VILLA | 5/25/2012 - 1:05pm

There is a plethora of problematic analysis in this editorial. Perhaps regulation is not the problem in the JP Morgan debacle given the Dodd-Frank bill a spiders-web of regulation already in place. You might consider that before the default/knee-jerk position: more regulation. You might consider what a market economy needs as opposed to a statist economy. Europe is a laboratory of the economic pathologies of statist economies like Greece with regs out the ying yang. How is that going for them?

Re education you don't ask the question why has education become unaffordable? At a time when you question spending on defense and you question budgets which seek to trim bloated and ineffective social spending and you question private sector compensation should you not question the bloated educational establishment which assumes that more money means better education? Should you have to mortage your existence to attend XYZ University?

Lastly the snide remark about "rote repetition of catechetical formulas" as a hermaneutic for the dispute at the Pontifical Academy of Life makes me think about your commitment to Catholic teaching. At the academy the subject of "dispute" and demeaned with the word "fundamentalist" is the notion that a Catholic academy should reflect Catholic teaching and morality and Catholic anthropology because it's reflective of the truth about the human person. We're talking about pretty basic things: every human is made in the image and likness of God from conception. The dignity of the developing human in utero must be respected. Procedures like IVF do not respect that dignity and violate the basic meanings of sexuality in its unitive and procreative aspects. Ah Humanae Vitae! A lot of this is the poison fruit of those who reject the settled teaching of the Church and natural law on contraception. For dissenters nothing is ever settled because the dissenter rejects the notion of religious truth and hence the call for never-ending dialog and assent to that truth becomes "fundamentalism."

Joseph J Dunn | 5/25/2012 - 10:49am
Re: The Price is Not Right

Jesuit universities could use their competitive position to bring needed changes to the methods of financing college education. Clear communication about financial aid packages is vital. Are these tested in focus groups to assure that high school seniors and their parents, who may be less educated, will understand any future debt burdens? Decisions about debt need to be made in the context of realistic estimates of future income. University of Santa Clara's website includes a Survey of Recent Graduates, taken six months after graduation. All colleges should gather and post this important information. Links to information sites such as the Department of Labor Occupational Employment Statistics would also help students make informed decisions.
Better information at Jesuit universities will prompt prospective students to require the same from other institutions. That would be a first step in reform.

 
E.Patrick Mosman | 5/25/2012 - 10:39am
The statement "whose research, especially on stem cells, was thought to contravene Catholic teaching," needs clarification as what exactly Catholic teaching is on stem cell research. Catholic teaching opposes the use of embryonic stem cells in both laboratory and clinical research but does not oppose the use of one's own or adult stem cells in such studies or in actual practice. The scientific rational supporting embryonic stem cell use is questioable at best and a real open scientific discussion simiar to the Einstein-Bohr  discussions on quantum physics should be welcome.
Ron Skufca | 5/25/2012 - 10:32am
Pope Benedict has a nice thought about sitting down to dialog, but how does that measure with his attack on the LCWC?  If a sheep starts eating the other sheep, is it really a sheep?

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