Eugene Robinson of The Washington Post and Lawrence Kudlow of the CNBC cable network review the same set of economic data and come up with diametrically opposed understandings of the information. Both, however, conclude that the economy is in very good shape.
Robinson describes some of the current economic data. The economy grew 4.6% in the second quarter and 5% in the third quarter. The unemployment rate has fallen to 5.8%. Over 5 million jobs have been created since President Obama took office, and nearly 10 million jobs have been created since the worst of the recession. The stock market is at record highs, and health care costs are rising at their lowest rate in decades.
Robinson also points out that presidential candidate Mitt Romney promised to get unemployment down to 6% and it is now below that figure. He further notes that almost certainly the much maligned Affordable Care Act is at least partly responsible for the drop in the rate of health care costs. Most importantly he insists that Obama rescued an economy that was on the brink of depression. There can be little question that government does have a role to play in creating an economy that works for all its citizens.
Lawrence Kudlow, on the other hand, strongly disagrees. While he notes that the market has risen 43%, he attributes it to record profits and expanding multiples. He insists that nothing the government or the Federal Reserve has done has worked. For Kudlow the growing economy is occurring in spite of government, and because of the power of a free market economy to overcome bad policy. He insists that none of the quantitative easing has worked. He even points to the 1920s as a period when the free market worked admirably. Given what happened in 1929 that is a little difficult to accept, but for Kudlow, the winning formula is lower tax rates, less spending, deregulation and a strong dollar.
It is fairly easy to see that when one’s positions are driven by an ideological point of view, it is nearly impossible to find common ground solutions. Clearly neither the free market by itself or a solely government-run economy is the answer. There are important elements from both ends of the spectrum that need to be included in a comprehensive approach to maintaining a strong and vibrant economy. I would suggest, however, that we can gain some important direction by considering some of what Pope Francis has had to say on the economy.
Francis wants to put the economic focus on hunger and diseases like Ebola which are often spread by neglect. He is fighting against inequality and sees poverty as a scandal. He believes that access to capital is as much a human right as education or health care. Francis sees Kudlow’s system as benefiting mainly those at the very top of the wealth and power ladder.
The contrast between Kudlow and Francis is pretty stark. The overriding interest for Kudlow and Wall Street is corporate profits. On the other hand Francis is seeking justice and advocating for the poor. He is challenging the notion that the market left to its own devices will be best for the economy. When Wall Street says the free market is best it means that it is best for making money for the powerful. Francis and Catholic social teaching has always been about doing what is best for all people.
At a basic level it seems to me that Francis is saying if you really care about human beings, the notion that you can just sit around and wait for good things to happen makes no sense. More specifically, when you see the huge worldwide inequities produced by the current operation of capitalism you can’t look on it benevolently. For it to be a truly worthwhile financial system capitalism must also consider and factor in the needs of the poor and the middle class. In other words, while the free market economy has much to offer, it cannot be 100% free.
The precious free market of Lawrence Kudlow is great for producing corporate profits and making a few people rich. Kudlow seems to be proposing the old trickle down economic theory. Just leave things alone and the poor and middle class can have the crumbs that fall from the master’s table. Francis is saying that is not nearly good enough.