28 May 2008

Memorial of St. Ubaldesca

St. Ubaldesca was born in Calcinaia, near Pisa, in 1136 and joined the Order of St. John of Jerusalem at the age of fifteen. She worked for fifty-five years in the infirmary attached to the monastery at Pisa, caring for her neighbour out of love of God. She died on 28 May 1206 and her body was taken back to Calcinaia where it is enshrined.


O God, pride of the humble lover of virginity, you called Saint Ubaldesca to the religious life in the Order of St. John of Jerusalem: grant that through her prayers and example we may rejoice in being humble and follow you, with pure minds. We ask this through our Lord Jesus Christ your Son, who lives and reigns with you and the Holy Spirit, one God, for ever and ever. Amen.
(From: The Missal with readings of the Order of St. John of Jerusalem of Rhodes, & of Malta, London 1997)

For more information on this remarkable saint visit Fr. Gerard's page at the South African Association of the SMOM

26 May 2008

The George Bailey School of Economics

One of cinema's greatest directors, who also happened to be Catholic, was Frank Capra. While It's A Wonderful Life has been overplayed at Christmas time in recent years there is still a valuable lesson to be learned from the character of George Bailey.

The following article was written by Allan C. Carlson and published in The American Conservative.

What Would George Bailey Do?

Any plan to right the housing market should put families first.

by Allan C. Carlson

Have you put any real pressure on these people of yours to pay those mortgages?

PETER BAILEY: Times are bad, Mr. Potter. A lot of these people are out of work.

POTTER: Then foreclose!

BAILEY: I can’t do that. These families have children.

POTTER: They’re not my children.

BAILEY: But they’re somebody’s children, Mr. Potter.

POTTER: Are you running a business or a charity ward

Mr. Potter’s questions from the 1946 film “It’s a Wonderful Life” now haunt American politics. The contemporary mortgage crisis has destabilized the American and global economies, imperiled great banking enterprises, and threatened hundreds of thousands of American households with the loss of their homes. Washington politicians on both sides of the aisle have in recent weeks essentially answered Mr. Potter’s final query, affirming the federal government’s role as “charity ward” of last resort, this time for both threatened homeowners and endangered financiers.

Regarding the former, the legislators’ actions might be viewed as more than a craven quest for votes. They could be understood as responding to an echo of another quote
from “It’s a Wonderful Life,” this time by Peter Bailey’s more famous son, George:

Just remember this, Mr. Potter, that this rabble you’re talking about …. they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?

Our own politicos shout “no!” while approving billions to refinance delinquent loans. (Meanwhile, the Federal Reserve uses public dollars to save Bear Stearns.)

During the 1930s and 1940s, filmland’s Bailey Building and Loan had built lovely suburban homes for struggling families and had weathered several financial crises, albeit always through private rather than public means. How would George Bailey, the fictional saint of the mortgage industry, view the current crisis and federal response?
Put another way: What would George Bailey do?

Some real history may help here. The classic Savings and Loan association portrayed in the film grew out of the “friendly society” tradition of 19th-century America. Often associated with ethnic groups—two of my great-grandfathers were founders of the Skandia Society serving Swedish immigrants in Des Moines, Iowa—these early mutual savings banks encouraged thrift and made loans to responsible and credit-worthy borrowers. Depositors and borrowers alike were members of the society, with voting and oversight rights. This ensured that those who took out loans were carefully scrutinized and personally monitored by the lenders.

Congress stabilized, and to some degree nationalized, the system through the Federal Home Loan Bank Act of 1932. This measure regularized the long-term, amortized
mortgage for home purchases, mobilized capital toward this end, and allowed Savings and Loans to pay higher interest than commercial banks on savings deposits. The chartering of the Federal National Mortgage Association (Fannie Mae) came in 1938, funneling still more money into the system. Tax reforms made the interest on home mortgages deductible, turning houses into a favored form of capital investment.

After World War II, the mortgage business soared. The Serviceman’s Readjustment Act of 1944 guaranteed VA home loans for veterans at up to 100 percent of the selling price. President Harry Truman told the National Conference on Family Life that “children and dogs are as necessary to the welfare of this country as is Wall Street and the railroads.” The sweeping Housing Act of 1949 committed the country to providing “a decent home … for every American family.” Federal Housing Administration loan guarantees also came into play. In 1949 alone, the industry recorded 1,466,000 housing starts, an unprecedented number.

This housing boom had its own sociology. Nearly all the new VA- and FHA-insured loans went to young married couples starting their families. As the official Fannie Mae history of housing explains, federal mortgage programs “made home ownership available to many families who could never have considered it otherwise.” They allowed Americans to express their preference “for bringing up children in the ‘wholesome, clean-air’ environment of the suburbs.”

Importantly, calculations of mortgage eligibility during this era counted only a husband’s income. Underwriters saw young married women as potential dropouts from the labor market once they became pregnant. This policy also had the unintended effect of holding housing prices down. Americans responded to this favorable policy environment. Between 1945 and 1960, there was a 90-percent increase in the number of owner-occupied homes. The marriage rate climbed sharply, the fertility rate soared, and even the divorce rate fell steadily after 1946. By the early 1960s, the government’s pro-family housing policy could be judged a success. To be sure, there were problems: a broad national over-investment in housing, which retarded other forms of capital investment; a discouraging conformity in suburban housing design; and a design preference for the “companionate” model of marriage and home life, which abandoned the function-rich family. All the same, George Bailey would surely have been proud.

The housing and mortgage markets, however, began operating in weird new ways around 1970. A massive investment in housing continued, with total non-farm mortgage debt climbing from $358 billion in 1970 to $2.2 trillion by 1987, an after-inflation increase of 311 percent. The number of housing units climbed from 65 million to 90 million. Yet the number of young married couples (husband aged 25-34) in homes actually fell by 2 percent over these years. The number of child-rich households with six or more persons plunged by 57 percent.

What was happening? In short, the family-centered nature of the American housing boom had unraveled. Policy changes were part of the dynamic. Under feminist legal pressures, the “husband-only” income rule for determining the maximum of a family’s mortgage disappeared. A wife’s income must also be counted. Results included upward pressure on housing prices and a disincentive to be a stay-at-home mother. Housing officials exhibited new interest in providing shelter for nontraditional households, explaining that there was no longer a “standard family” guiding housing demand. They introduced easier eligibility standards, and the proportion of new FHA mortgages going to married-couple households with children fell sharply. Government publications stressed that houses were increasingly purchased with “resalability” rather than “livability” in mind. This meant that housing was now more a form of investment and a hedge against inflation than a refuge from the elements.

Housing analysts George Sternlieb and James Hughes pointed to an even stranger
development: while the number of distinct housing units climbed by 38 percent between 1970 and 1987, the average household size fell from 3.14 to 2.64 members, a decline of 16 percent. This meant that “the nation’s population is diffusing itself into an expanding supply network.” More darkly, they concluded that “the very decline in the size of household” may be “a consequence of the availability and costs of housing units generally.”

Translated from academese, this meant that America’s very success in building homes now perversely encouraged family breakup through separation and divorce. Direct and indirect subsidies also encouraged home ownership among singles by substituting government help for the economic gains, such as economies of scale, once
provided by marriage and family living. In addition, your friendly neighborhood Savings and Loan societies changed. In the late 1970s, they gained the ability to offer checking accounts and shed many state regulations. In 1980, Congress gave the “thrifts” power to make commercial loans, issue credit cards, and otherwise behave like regular banks. The result was disaster: a series of speculative loans and investments brought on the infamous Savings and Loan crisis of the 1986-95 period. Half of the nation’s savings and loans went out of business; taxpayers took over about $125 billion in bad debt. And George Bailey rolled over in his Hollywood grave. At great public cost, stability returned to the housing and mortgage markets by the later 1990s.

Our current crisis was a product of the new century, a fairly conventional speculative bubble involving legislators, regulators, lenders, great financial houses, and
borrowers in roughly equal culpability. Under the mantra that “housing prices in
America have never gone down,” modest eligibility standards for taking out
mortgages were essentially scrapped. Risk was “shared”—read hidden—by the
relatively new process of bundling mortgages for resale to investors. As housing prices soared, the rush to get into the game produced all the usual assurances from the financial talking heads, until the inevitable collapse.

So what would George Bailey do now? First of all, I think he would want to examine the sociology of the crisis. How many of the imperiled homebuyers are actually young families with children? These he would want to help. How many are singletons who used this speculative opportunity to jump onto the housing escalator? How many are empty-nesters who rode the bubble to move into a McMansion? How many are would-be investors looking for quick turnarounds in a rising market? There would be little sympathy for these latter cases, I suspect.

To help threatened families with children, George Bailey would support private and public efforts that put them first in line for access to renegotiated and publicly guaranteed mortgages. “Households with dependent children” would serve as the defining criterion. He would also probably agree with guidelines recently offered by the Heritage Foundation, including:

All government-assisted refinancing should go only to homeowners who use that home as their primary residence. No help should be given to investors, speculators, owners of vacation homes, homebuilders, realtors, mortgage brokers, or bankers. Help should also be denied to anyone who lied or made misrepresentations on their original mortgage applications.

George Bailey would surely marvel at the stupidity and greed of our current crop of great financiers, who make Mr. Potter look like a genius—even a humanitarian. George Bailey knew truly good capitalists: his friend Sam Wainwright earned money through manufacturing useful products (including, yes, war materiel). He would shake his head, though, at Wall Street’s more recent “Masters of the Universe,” who claimed their vast personal incomes and stock options simply by piling onto the latest investment fad. He would want to see these sham geniuses and their boards of directors held personally liable to stockholders and investors. He would expect criminal fraud to be vigorously investigated as well.

I doubt, too, that George Bailey would support a quasi-public bailout of Bear Stearns or any other threatened financial giant. He would probably agree with many contemporary analysts that Bear Stearns has been an unusually nasty company without a shred of public-spiritedness. In its failure, it would merely have reaped what it had sown. Bailey would dismiss as preposterous claims that the fate of the American and world economies hinged on this rogue company’s survival.

Over the long haul, George Bailey would probably try to return the housing and mortgage industries to their real purpose: providing homes to families. He would support limiting the tax deduction on home-mortgage interest to one principal residence per family. He might even favor a cap on the amount that could be deducted, so that only good shelter—not princely luxury—enjoyed favored tax treatment. And he would probably redistribute tax benefits to families according to their number of dependent children, raising either the child tax credit or the per-capita deduction for children—or both.

As his father had noted, “These families have children.” That, I believe, would be George Bailey’s touchstone for reform.


Allan C. Carlson is president of The Howard Center for Family, Religion, & Society in Rockford, Illinois. His latest book is Third Ways.

25 May 2008

The Eucharist Is The School of Charity

Pope Benedict addressing pilgrims on the feast of Corpus Christi stated that, "the Eucharist reveals the true beauty of Christianity," and is "the school of charity and solidarity that should make us more attentive to the many people who struggle to procure their daily bread. He who eats of the bread of Christ cannot remain indifferent before those, who also in our day, are deprived of their daily bread."

The Holy Father added that Christians are called to be attentive in concrete ways to the many who go without food.

"Dear brothers and sisters, let this feast of Corpus Domini be an occasion to grow in the in this concrete attention to our brothers, especially the poor."

"We obtain this grace from the Virgin Mary, from whom the Son of God took flesh and blood, as we repeat in a celebrated Eucharistic hymn, set to music by the one of the greatest composers, Ave verum corpus natum de Maria Virgine… Mary, who brought forth from her womb Jesus, who was the ‘tabernacle’ of living, imparts to us her own faith in the holy mystery of the Body and Blood of her divine Son, since he is truly the center of our lives."

14 May 2008

Christian Mortification

In addition to prayer, an essential duty in our spiritual life is performing acts of mortification. As we passed from Lent to Easter and now into Ordinary time it is easy to relax in our spiritual duties by thinking that we "survived the penances of Lent" so now don't have to worry about it again until next year. Perhaps this attitude is one reason we fail to progress in our spiritual life? While the penitential aspect of our faith is more pronounced during Lent is not an excuse to ignore it the rest of the year. One of the most memorable moments of the Lourdes Pilgrimage was meditating on the stations of the cross. The Stations provide considerable themes for meditation. As we prepare to begin the year of St. Paul in June, let us remember that his constant teaching was "Christ Crucified."

Reflecting on Christ crucified will remind us to mortify ourselves. According to Cardinal Mercier, "the aim of Christian mortification is to counteract the evil influences which original sin continues to exert on our souls, ever after Baptism has regenerated them." He provides 10 simple steps we can follow to mortify our bodies according to the practice and examples of the saints.

1. With regard to food, restrict yourself as far as possible to simple
2. Pray to God often, to help you by his grace as to not overstep the limits of necessity.
3. Take nothing between meals, unless out of necessity or for the sake of convenience.
4. Practice fasting and abstinence, but only under obedience and with discretion.
5. It is not forbidden to enjoy some bodily satisfaction, but do so with a pure intention, giving thanks to God.
6. Regulate your sleep. Set a strict hour for going to bed and waking up in the morning, avoiding the temptation to "lay around."
7. In general, take your rest only in so far as it is necessary; give yourself generously to work, taking care not to exhaust your body, but guard against indulging it.
8. If you suffer some slight indisposition, avoid being a nuisance to others through your bad mood; leave to your companions the task of complaining for you.
9. Guard against making the slightest illness a reason for dispensation or exemption from your daily schedule.
10. Accept with docility, endure humbly, patiently and with perseverance, the tiresome mortification called illness.
"it is necessary to die in order that God may live in us, for it is impossible to achieve the union of the soul with God by any means other than by mortification." St. Francis de Sales

08 May 2008

Lourdes Pilgrimage

This past week I joined over 8000 fellow pilgrims with the Order of Malta from 41 countries, including over 1600 malades, on the SMOM's 50th annual pilgrimage to Lourdes. Whether you have been to Lourdes, are going, or are unable to go, there are some excellent resources to celebrate this Jubilee Year.

The official Lourdes website is Lourdes-France.org . There is also a special designated website for the 150th Anniversary Jubilee, Lourdes Jubilate! 2008. To save some time looking around these sites you can find webcams of the Grotto, the Rosary Basilica, the evening candlelight procession, and other video is available on the site. It isn't always current but is fun to watch.


This blog and the opinions are all my own and in no way imply the endorsement from any organization. Nor does a recommendation of another blog or web site imply my agreement or endorsement of everything found on their site.