The Pope, Obama and a Former Banker Walk Into a Slum - Does the 1% Still Win?


In the 1990s, I was part of a wave of investment bankers that invaded Argentina, evangelizing the mantra of the unregulated free market, which had made us millions. Free markets had become the religion of politics, and simple economic numbers like gross domestic product, the saints.

Our days were spent lecturing Very Important People, our nights at fancy restaurants with tango dancers to entertain us. During one trip from my five-star hotel, which was in Buenos Aires but looked like Manhattan, my cab got caught in a swarm of banners and megaphones: political protestors from the neighboring slum.

With the taxi stopped, the shacks clustered next to the road were no longer just a dark blur of concrete and reflective tin. They were homes. Sheets operated as doors. Bare bulbs dangled from live wires, illuminating a few choice items discarded by the wealthy and the faces of slight children. A mother of Mary statue sat in a corner.

Slums are carved into the lands of Buenos Aires that others don’t want: directly under an airport’s flight path or huddled next to busy train tracks and highways. They are anathema to most Argentinians. As the local bankers who dared not visit would say, slums are “dangerous places filled with squatters who have no respect for the rule of law”.

It was in these places, in those times and for much of his life, where the auxiliary bishop of Buenos Aires, Jorge Mario Bergoglio, became a regular.

Now he’s the pope, and they call him Francis. He has used that larger platform to focus on the ugly side of the free markets, the side he saw all those years in the slums. He has called the free markets “a crude and naïve trust in the goodness of those wielding economic power”.

In the United States, since the election of Ronald Reagan some 33 years ago, the bulk of policy has been written primarily for the benefit of the wealthy. Taxes have been made more regressive, labor laws relaxed, markets deregulated. The shift changed this country and the world, profoundly and yet simply, giving more power to those with capital at the expense of those who labor. Voters were sold the idea that growth, no matter how it was generated, would eventually lift all boats.

Until, of course, the financial crisis that began some seven years ago exposed the economic costs behind growth at all cost. The crisis enabled the election to this nation’s highest office a community organizer with Catholic roots who had spent his fair share of time looking at the ugly side of unregulated free markets.

These two men, President Obama and the pope, know what a recovering i-banker like me has learned: that income inequality is one of the most morally corrosive issues facing the world today – “the defining challenge of our time”, as the president says. Except that when they met today for the first time at the Vatican, when the president told the pontifex he was "a great admirer", Francis had the upper hand because of what he knows that Obama and the bankers do not.

Barack Obama is not Pope Francis, and not just because the slums of Buenos Aires are so much worse than the South Side of Chicago. Pope Francis knows, in a visceral way, that the income equality we have in the US and Europe will get much worse if nothing changes. More importantly, he knows that these first-world problems are embryonic relative to those back home in Argentina.

The pope knows that the US is moving toward a Latin America-style economy, one wherein the Koch brothers get multiplied many times over – one wherein the wealthy don’t just want more money or opportunity, they want power. The problem with Francis’ Argentina writ large is a 1% that wants a political system run with the intent to guarantee that their wealth is never threatened. The problem with that is a wealthy class that wants the working class to be disposable, voiceless and immobilized.

This is the real issue President Obama faces: he needs to stare down, as Pope Francis has, the morally and intellectually corrupt philosophy that unregulated free markets help everyone.

It is a philosophy at the heart of the American conservative movement.When needed, conservatives drag out a gaggle of economists to argue their position. These economists, always a thoughtful lot when it comes to human behavior, know the wealthy will benefit far more. Yet the GOP’s sham philosophers argue that growth, even if unevenly distributed, will be a net benefit – because the winners will win more than the losers lose. We will then all share the winnings, goes this bankrupt economic philosophy, either by way of investments that boost jobs, or else from politically forced redistribution by way of taxes.

The sharing-the-winnings part never happens. It certainly didn't happen prior to the crisis, and it didn't happen even as the American economy collapsed. The winners kept using their new wealth to further empower themselves. They did this by flooding the political system with money to stack the deck. Rather than invest in job-friendly projects, they moved production to places with the cheapest labor and the fewest regulations.

When you bend the rules to favor the wealthy, they never give back.

Francis knows all of this because it is how Argentina, and much of Latin America, has been run for centuries. The result: corrupt oligarchs intent on maintaining their outsize wealth, and a calcified social structure wherein a percentage of the population is entirely disenfranchised and many millions live in tin-shack slums.

Francis, too, is a community organizer – indeed, that is all a pope really needs to be. “I prefer a church which is bruised, hurting and dirty,” he wrote in his mission statement last November, “because it has been out on the streets, rather than a church which is unhealthy from being confined and from clinging to its own security.”

Francis has been out on the streets. For the last five years Obama has been performing triage, attempting to arrest the damage done by the collapse of the free-market philosophy, only now attempting to focus on its most pernicious result.

When they met behind Vatican closed doors at that desk in the papal library this morning, I hope President Obama took his audience with Pope Francis to discuss that to which Bishop Bergoglio bore witness: the tin shacks and the mud streets, the details that give you real-world authority along with the moral and political kind. I hope the saintly man from Buenos Aires, who’s spent a life giving voice to the voiceless, can still teach the man from Chicago what he should have been trying to fix all along.

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