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.


Anonymous said...

The Federal Reserve and it's irresponsible monetary policy caused the massive bubble that has now burst.

The bailout is not only folly, but immoral. I recommend you visit Have you ever heard of the Austrian School of Economics. I think you would find it interesting.

Fiat currendy is not sustainable. Is it safe to assume your Monarchy's currency would be backed by gold? I hope so.


Nick said...

Yes the Fed has a part, but it is not entirely to blame. The bottom line is that people got greedy.

Yes, I've heard of the Austrian school of economics. In fact I've read "Democracy: The God That Failed" by Prof. Hans Hermann-Hoppe, a proponent of the Austrian school. The ASoE has some good points, but I'm no anarcho-capitalist.

As for the gold standard, you have it exactly right. "My" monarchy would definitely not be a fiat monetary system. Money not backed by some precious metal is folly!

Anonymous said...
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Anonymous said...

Those who own the Federal Reserve are the very ones who embraced that religion which has always sought to destroy Crown and Altar.
The Federal Reserve is not part of American Government, but a conglomerate of World Banks. The 700 billion bailout is not due to greed or a housing crisis, but rather a tool to lash to peasants to the millstone of unprecedented taxes whild making them feel guilty for being "greedy." Yes, Yes, Tyrone and Jose should not have gotten mortgage loans, but any fool knows that. Why did they get them? A similar question-Why do the borders remain open for migration? If not by law then by inaptitude? Because the immigrants are wanted here, and not by Joe Shmoe working man either.