Saturday, October 25, 2008

The Financial Crisis

When the $700 billion bailout package was before the U.S. Congress, I was very much opposed to its passage. My view was that banks got greedy in lending outrageous sums of money in the form of mortgages to people who couldn't afford them in the first place. The banks were dying, and should be left to die. But as time went on and I read more about the financial crisis, I think the bailout may just have been a good thing.

In keeping with the Catholic Church's teaching that usury (the charging of interest on loans) is sinful, I believe that profit should be taken out of banking. Part of the bailout involved the government buying shares in bank stocks, thus making the federal government part owners in some of our largest national banks. This I think to be a good thing. In my perfect monarchy, there would exist a state bank owned wholly by the crown. Usury would have no place in the lending of money (a small amount of interest could be charged to cover the expenses of bank employees as well as to compensate for inflation). The bailout plan is a far cry from the royal bank I dream of, but at least it will get government involvement in banking and hopefully prevent greediness to the degree we have recently seen.