This week brought forth a striking instance of irony that deserves our attention. An unexpected event unfolded, compelling us to reflect on the deeper implications.
“A Vatican monsignor, already facing charges for allegedly attempting to smuggle 20 million euros ($26 million) from Switzerland to Italy, was arrested Tuesday in a separate inquiry for reportedly using his Vatican bank accounts to launder money,” reported AP.
“In Salerno, southern Italy, financial police revealed that Monsignor Nunzio Scarano, known as ‘Monsignor 500’ due to his alleged preference for large-denomination banknotes, funneled millions of euros through Vatican accounts under the guise of fictitious donations from offshore companies.”
At Economic Prism, we regard this as further evidence that we are amid an era characterized by the relentless pursuit of wealth, a condition cautioned against in the New Testament: “Ye cannot serve God and mammon,” as Matthew conveyed in the Sermon on the Mount.
This prompts the question: how can we make sense of a world where everyone, even a high-ranking priest, appears to be solely focused on personal gain? The notion of earning money through honest means seems increasingly outdated, and this pervasive dishonesty reaches into the core of our financial and governmental frameworks.
Book Deals and Directorships
The actions of Monsignor 500 draw parallels with the questionable dealings between the Federal Reserve and the Treasury. The Fed generates fictitious funds and lends them to the Treasury, which then utilizes these questionable resources to cover its deficits and distribute benefits for expenses that the populace cannot bear.
But how does this corruption differ?
One key distinction lies in the scale of the implications. The priest’s misconduct doesn’t create worldwide economic distortions; it doesn’t manipulate the value of money or inflate asset prices. Unfortunately, the same cannot be said for the antics of the Fed and Treasury.
Furthermore, while wrongdoers like the monsignor may face incarceration, former government officials are often rewarded with lucrative book deals and positions in private equity firms. It’s a shocking reality that continues to unfold.
Take, for instance, former Treasury Secretary Timothy Geithner. After a year out of public office, he is set to publish a book detailing how he maneuvered taxpayer funds to private corporations during the financial crisis. Following that, he will assume the role of president and managing director at Warburg Pincus in March, as reported by CNBC.
Debt Downgrade Retaliation
But what does Geithner truly know about managing investments or overseeing a private company? Since 1988, his experience has been limited to moving between the Treasury, the Federal Reserve, and the International Monetary Fund, focusing primarily on committee meetings, issuing government debt, and orchestrating bailouts.
Unsurprisingly, his relationships in high places are valued far more than his actual ability to manage finances. While we wish him well in his future endeavors, several inconsistencies from his past warrant clarification. Here’s what we mean, as reported by Business Week…
“Former U.S. Treasury Secretary Timothy Geithner informed McGraw Hill Financial Inc. Chairman Harold W. McGraw III in 2011 that the downgrade of U.S. debt by Standard & Poor’s would provoke a government response, according to S&P.”
“S&P submitted a declaration by McGraw yesterday in federal court in Santa Ana, California, pertaining to its request for the U.S. government to provide potential evidence supporting its claim that the government filed a fraud lawsuit against it last year as a form of retaliation for the downgrade.”
“In his court statement, McGraw noted that Geithner reached out to him on August 8, 2011, shortly after S&P became the only credit rating agency to lower the U.S. debt rating. Geithner allegedly stated that S&P would be held accountable for this downgrade.”
Shortly thereafter, the Justice Department launched a lawsuit. Could this all merely be coincidental?
“The allegation that former Secretary Geithner threatened or initiated any action that led to retaliatory government action against S&P is false,” said Jenni LeCompte, a spokeswoman for Geithner, in an email statement.
Perhaps Ms. LeCompte was simply hoping for the best behind the scenes.
Sincerely,
MN Gordon
for Economic Prism
