On Sept. 15, 2008, the investment bank Lehman Brothers filed for bankruptcy, signaling that the financial crisis that had been building since 2007 had reached a critical stage. The stock market plummeted, and the global economy stood on the edge of the abyss.
The financial crisis caused immense material suffering and the loss of human potential as many Americans lost their homes, gave up their chosen career paths, deferred having children and forwent medical treatments they could not afford. The decline of trust in secular institutions, including the government and the banking industry, could have been an opportunity for the Catholic Church to offer guidance, but it has not been quick or consistent in empowering people to address the harmful effects of the new global economy.
Almost exactly 10 years after the Lehman Brothers bankruptcy, the Census Bureau reports that the median household income has finally recovered to levels seen before the financial crisis, a positive achievement but one that highlights the millions in lost income in the intervening years. Between 2007 and 2010, the median net worth of U.S. households declined by 39.4 percent, and African-American and Hispanic households experienced further decline into 2013. Unemployment had risen to 10 percent by 2009, and millions more Americans were underemployed or had given up hope of finding a job.
People are unable recognize the complex social causes for their individual plight.
An increasingly individualistic culture left many Americans ill-equipped to deal with this material and personal loss. As the sociologist Jennifer M. Silva found in interviews for her 2013 book Coming Up Short: Working-Class Adulthood in an Age of Uncertainty, many working-class young adults interpret their economic problems as challenges they must face alone, rather than seeking solidarity with others. This is not primarily because such opportunities for solidarity are unavailable, but rather because these young adults do not trust the people and organizations that might work with them to improve their situation. As a result, people are unable recognize the complex social causes for their individual plight.
This same individualism hampered the public policy response to the financial crisis. Recovery measures like bailouts, stimulus packages and financial regulations generated a rapid political backlash as critics warned about the increasing scope of government involvement in the economy and the ballooning national debt. Congress slashed funding for public assistance programs like the Supplemental Nutrition Assistance Program (food stamps), the need for which had significantly increased in the aftermath of the crisis. Support for labor unions among Americans fell below 50 percent, as some blamed organized labor for the loss of manufacturing jobs, and Republicans like Wisconsin Governor Scott Walker curtailed the rights of public sector unions. Last year, the Trump administration signed a bipartisan bill that weakened some of the key banking regulations put in place by the Dodd-Frank Act of 2010. It was as if the American people forgot how the markets and financial institutions had betrayed them, and instead blamed their woes on the very forms of public solidarity needed for recovery, both personal and social.
The Vatican has provided some forceful responses to the global financial crisis. For example, in 2011 the Pontifical Council for Justice and Peace released a document calling for the reform of the international financial system, and earlier this year the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development jointly issued a similar document. Likewise, in his 2009 encyclical “Caritas in Veritate,” Pope Benedict called for the reform of economic institutions with “real teeth” to promote international cooperation and solidarity.
Although these documents propose much-needed reforms to the global economy, the Catholic Church’s response otherwise has been lacking. It has yet to adequately address the powerlessness experienced by Catholics facing the immensity and complexity of the global economy and the United States culture of individualism.
The Catholic Church has yet to adequately address the powerlessness experienced by Catholics facing the immensity and complexity of the global economy.
How can the church address this powerlessness and build up what Pope John Paul II called “networks of solidarity” (“Centesimus annus” No. 49) now, 10 years after the financial crisis?
When the priests Yvan Daniel and Henri Godin published France: Mission Country? in 1943, it exposed the extent to which the working class in France had abandoned the Catholic Church, in large part resulting from the latter’s perceived alliance with the wealthy and powerful. The soul-searching that resulted from the book’s publication led to the emergence of several creative ministries engaged in outreach to the working people of France. Although some of these experiments failed, others (and similar efforts across Western Europe) helped raise up communities that embodied the spirit of Catholic social teaching and had a deep impact on European economic and political life in the decades after World War II.
Although our situation is quite different from that faced by Catholics in mid-20th-century France, we need to muster the same creative energy to develop networks of solidarity that empower people in the aftermath of the financial crisis.
Catholics can transform already-existing institutions to better meet people’s needs in our age of austerity. Catholic theologians like Julie Hanlon Rubio and David Matzko McCarthy have proposed ways that families can become more engaged with their local communities. John Gehring has noted how Catholic leaders are increasingly working with labor unions in support of initiatives such as the recent push for a living wage in the fast-food industry. Nathan Schneider has called on Catholics to help establish cooperatives that empower workers and create bonds of solidarity not possible in traditional forms of business enterprise.
At the same time, Catholic parishes and dioceses ought to adapt existing forms of faith communities, or create new ones, to better meet the needs of workers. Parishes working together, or Catholics working with ecumenical partners, could form small faith communities for particular social groups such as retail workers and business managers. These groups could engage in a form of faith formation where participants share their experiences in the workplace and reflect on them in the light of Christian faith.
Similarly, churches should bring together members of distinct groups such as the working poor and the middle class, or immigrants and the native-born, to learn from one another and develop faith-inspired strategies for meeting community needs. While communities of this type would not necessarily engage in direct social action in the way unions or community organizing groups do, they could contribute to the conscientization that spurs people to join such action. And for groups such as undocumented immigrants and some types of laborers for whom political organizing is especially difficult, these groups could serve as a more discreet way of building solidarity.
The death of Lehman Brothers marked a turning point for economic life in the United States. The financial crisis signified the failure of the old economic order and devastated the lives of millions of Americans. Yet this calamity can still be a source of new life. Efforts to build economic solidarity have sprouted across the country in the years since the crisis. Catholics can learn from these efforts and make their own contributions and also provide a spiritual foundation for these networks of solidarity and draw on the long tradition of Catholic social action to enrich them.