This growing influence was the subject of the Conference on China’s Financial Markets and Growth Rebalancing, held Oct. 2 through Oct. 3 at the Lincoln Center campus and co-sponsored by the Gabelli School of Business.

Keynote speaker Jennifer Carpenter, who is recognized for her groundbreaking research on executive stock options and managerial risk incentives, shared her assessments of the “real value” of China’s stock market— which opened more than two decades ago in Shanghai and Shenzhen and has grown into the world’s second- largest stock market.

“Now China is really ‘required reading’ for any student of sociology and certainly any student of finance,” said Carpenter, an associate professor of finance at New York University’s Stern School of Business.

She noted that China’s stock market is often derided as a “casino” due to speculations of market manipulation and fears that the country may be heading toward a financial crisis. However, her research found that stock prices in China are as informative of future profits as stock prices are in the United States.

“My view is that China is just getting its financial system up to where it needs to be to support a macro economy that is that large and fast growing,” said Carpenter.

Though investors may encounter financial risks related to liquidity and repatriation, Carpenter argued that both Chinese and global investors will likely benefit from China’s decision to open its capital markets.

“In some respects—at least in this context—global investors are having some bargaining power . . . in helping to drive reforms on China’s side,” she said.

The Limits of Autocracy

Conference sessions also examined China’s monetary and macro policy issues. Zhangkai Huang, an associate professor of finance at Tsinghua University, tackled the age-old debate: Are autocracies better at effecting economic policies than democracies?

In his presentation, “The Limits of Autocracy: An Analysis of China’s Renationalization,” Huang provided an overview of how Chinese politicians implement policies in an autocracy.

With a special focus on the dealings of the Shanghai Group, the Youth League Group, and the Princelings— three major political factions in China’s Communist Party—Huang examined the policy of renationalizing previously privatized firms between 1998 and 2007.

Huang defines renationalization as a policy where local governments repossess private shares. He argued that officials who choose privatization may risk upsetting the ruling autocrats before reaping the benefits.

These distortions, he said, might be responsible for China’s “recent stagnation in our market-oriented reforms and the massive build-up of debt.”

Pace University’s Padma Kadiyala, a discussant, questioned Huang’s assessment. She argued that it is premature to conclude that renationalization is an inefficient policy.

“I think the decision should be examined within the context of the legislative framework,” she said before noting that bank lending policies and bankruptcy rates could provide deeper understandings.

“In the absence of a strong legislative framework, maybe renationalization is the only way out.”

The conference was co-organized by the Bank of Finland Institute for Economies in Transition, and the Global Unit at the City University of Hong Kong.

On March 3, Daniel K. Finn, Ph.D., laid out his vision for what such a conversation might entail.

Finn, the William E. and Virginia Clemens Chair in Economics and Liberal Arts at St. John’s University, Collegeville, Mn., delivered “Building Better Economies: Why Popes and Economists Need to Talk” at the Rose Hill campus.

Finn said that, for more than 1,000 years, Popes have relied upon economists for their counsel. Today it is paramount that those currently in these disciplines look outside of their “silos” and overcome their context bias.

Finn said that behavioral economics is one area that is discovering much about poverty. He praisedScarcity: Why Having Too Little Means So Much, by Sendhil Mullainathan and Eldar Shafir (Times Books, 2013) for explaining how the context in which we live affects our decisions.

For example, he noted that most people would travel 30 minutes out of their way to save $40 on a DVD player that costs $100, but will not do the same thing to save $40 on a computer that costs $1,000. Even though they save $40 in both instances, the context causes them to change their minds.

Mullainathan and Shafir, he said, demonstrated how scarcity affects the mind. When you’re short on something like time, it captur
es the mind and focuses your attention. You develop what’s known as a “tunneling dividend”: The more you focus on one thing, the better you get at it.

“Scarcity causes a kind of bandwidth tax,” he said. “If you’re scarce in some way, your bandwidth is being used by the thing you’re worried about,” he said.

The researchers also measured the IQs of Indian sugar cane farmers both before a harvest—when they were poor—and then after the harvest when they were relatively well off. The IQs measured lower under the duress of poverty.

“Time and again, they’re finding that under the stress of scarcity, in this case poverty, people actually perform less well. They’re not less able people than wealthy people, but the poverty itself brings about this change,” Finn said.

“One possible outcome here is to realize that long-term deadlines for the poor misunderstand poverty-induced tunneling.”

Turning away from economists and toward popes, Finn delved into the musings of Pope Benedict XVI on the role of trust in markets. In the 2009 Caritas in veritate 35, Pope Benedict wrote that markets cannot fulfill their proper economic function without “internal forms of solidarity and trust.”

“The market doesn’t exist in a pure state. It’s shaped by cultural configurations that define it. So the market we have isn’t the market we’re doomed to have. We can have a better market than the one we’ve got,” Finn said.

The “economy of communion,” or civil economy, has been held up by both Popes Benedict and Francis as an alterative to profits-first enterprises. Businesses that embrace the civil economy direct their profits equally to the poor, to education, and to reinvestment in the firm.

But even if big business isn’t quite ready for this, reciprocity—when an exchange is tacitly paid forward rather than contractual—is an area where they can make an impact, Finn said.

“When possible, firms really ought to move self-consciously away from contracts and toward relations of reciprocity for a richer life, and more meaningful business,” he said.

Finn’s talk was part of a weeklong series of lectures on the good economy and was sponsored by theCurran Center for American Catholic Studies.

To see the entire lecture, click here.

November 2009—In the fall of 2008, amidst the financial and political turmoil enveloping America and the world, a group of religious leaders came together in New York City to consider the role of non-fundamentalist religious voices in the American public space. Meeting regularly, this group developed consensus for approaching public policy issues. Our immediate concern is the economy in both its domestic and global dimensions.

The economic crisis is a moral issue. Therefore, our response to it must be framed in moral terms. As our President has said, if our country is to recover its prosperity–not simply for our own good, but for the good of our interdependent world–then we must reinvest in society not only with money but with a renewed sense of shared civic responsibility.

Millions of people, here in America and around the world, are suffering from severe economic distress. Unemployment and bankruptcy are increasing. Foreclosure and fraud have multiplied. Poverty persists and deepens. This has occurred, in many cases, because of a disengagement of the financial sector from civil society and neglect of their responsibilities within it.

Neither is government or the citizenry exempt from responsibility. Our civic and public institutions have clearly weakened as checks on institutional gluttony. There is a feeling on Main Street that our largest institutions, whether public or private, are far removed from the disempowered voices of America. Decisions are being made at a distance from those among us most affected by this economic crisis.

Our personal and collective responsibilities to each other, locally, nationally, and globally, are rooted in our belief in the sacredness of human life. We believe that every human being has been created in God’s image and ought to be treated accordingly. This conviction suggests criteria for evaluating policy.

At all times, but especially during this time of recession, these criteria or values are: reinvestment in families and strong communities, protection of basic human rights, consideration of the common good, a weighted concern for the needs of the poorest and most vulnerable in society, stewardship of the natural world, and most importantly, a renewed sense of interconnectedness across the breadth of the human family, crossing ethnic, religious, racial, economic and ideological lines.

We call for the unequivocal accountability of corporate America to America. The corporation has the same responsibilities as any other citizen of civil society. Economic profit should not exclude moral purpose.
We call on government to listen more closely to America.

Today, the narrative of Exodus and redemption from oppression calls every person of faith to action—to be God’s hands in freeing God’s creatures from the oppression and moral corruption to which we all bear witness. But the Exodus was not only about freedom from oppression—it was also about the forging of a just society.

The words of the prophets call on us whether as individual people of faith, as members of religious communities, or as religious leaders, to organize and work for social change. We must reinvest in our society on civic and religious grounds lest its healing be impaired.

The public message of faith today calls on every American to become more profoundly engaged in our nation’s civic life through service and advocacy, to demand deeper accountability of our public and private institutions.
May the prayers of our lips, the work of our hands, and the spirit of our hearts come together to bring about a new era infused with justice, suffused with dignity, committed to the vision of a more perfect union.

For more information and to become involved, e-mail the Faith and Public Policy Roundtable at[email protected]

Faith and Public Policy Roundtable
Steering Committee (In Alphabetical Order)

Noah Arnow, senior student, Jewish Theological Seminary
Rabbi David Lincoln, Rabbi Emeritus, Park Avenue Synagogue, New York, N.Y.
*The Reverend Dr. Gary Mills, Assistant to the Bishop for Global and Multicultural Administration, Metropolitan New York Synod, Evangelical Lutheran Church in America
Rabbi Stephanie Ruskay, National Education Director, Avodah: The Jewish Service Corps
The Reverend Patrick J. Ryan, S.J., Laurence J. McGinley Professor of Religion and Society, Fordham University
Dr. Henry Schwalbenberg, Director, Graduate Program in International Political Economy and Development (IPED), Fordham University
The Reverend Jared R. Stahler, Associate Pastor, St. Peter’s Church, New York, N.Y.
*Rabbi Dr. Abraham Unger, Assistant Professor and Director of Urban Programs, Department of Government and Politics & Campus Rabbi, Wagner College, Rabbi, Congregation Ahavath Israel, Staten Island, N.Y.

*Steering Committee Co-Chair

Signatories to the Faith and Public Policy Roundtable Statement on the Economy (In Alphabetical Order)
Rabbi Marc D. Angel, Founder and Director, Institute for Jewish Ideas and Ideals
The Reverend Eduardo Arias, Pastor, Iglesia Luterana Sion, New York, N.Y.
Noah Arnow, senior student, Jewish Theological Seminary
The Reverend J. Elise Brown, Pastor, Advent Lutheran Church, New York, N.Y.
The Reverend Perucy Butiko, Pastor, Holy Trinity Lutheran Church, Hollis, N.Y.
The Reverend Amandus J. Derr, Senior Pastor, Saint Peter’s Church, New York, N.Y.
Rabbi Dr. David Ellenson, President, Hebrew Union College-Jewish Institute of Religion
The Reverend Sarah Geddada, Pastor, Floral Park, N.Y.
Rabbi Jason Herman, Executive Director, International Rabbinic Fellowship
Dr. Serene Jones, President, Union Theological Seminary
The Reverend Kathleen Koran, Assistant to the Bishop, Metropolitan New York Synod, Evangelical Lutheran Church in America, New York, N.Y.
The Reverend Barrie Lawless, Pastor, Our Saviour’s Atonement Lutheran Church, New York, N.Y.
Rabbi David Lincoln, Rabbi Emeritus, Park Avenue Synagogue, New York, N.Y.
The Reverend Jonathan Linman, Assistant to the Bishop, Metropolitan New York Synod, Evangelical Lutheran Church in America, New York, N.Y.
Rabbi Dov Linzer, Rosh HaYeshiva and Dean, Yeshivat Chovevei Torah Rabbinical School
The Reverend Joseph M. McShane, S.J., President, Fordham University
The Reverend Christopher Mietlowski, Pastor, Gustavus Adolphus Lutheran Church, New York, N.Y.
The Reverend Dr. Gary Mills, Assistant to the Bishop for Global and Multicultural Administration, Metropolitan New York Synod, Evangelical Lutheran Church in America
Rabbi Jack Moline, Director of Public Policy, The Rabbinical Assembly
The Reverend Daniel Peter Penumaka, Pastor, St. Paul’s International Lutheran Church, Floral Park, N.Y.
The Very Reverend Robert Rimbo, Bishop, Metropolitan New York Synod, Evangelical Lutheran Church in American, New York, N.Y.
The Reverend David Rommereim, Pastor, Good Shepherd Lutheran Church, Brooklyn, N.Y.
Rabbi Stephanie Ruskay, National Education Director, Avodah: The Jewish Service Corps,
The Reverend Patrick J. Ryan, S.J., Laurence J. McGinley Professor of Religion and Society, Fordham University
The Reverend Giovanny Sanchez, Pastor, Espiritu Santo Lutheran Church, Brooklyn, N.Y.
Rabbi Julie Schonfeld, Executive Vice President, The Rabbinical Assembly
Dr. Henry Schwalbenberg, Director, Graduate Program in International Political Economy and Development (IPED), Fordham University
The Reverend Kaji R. Spellman, Associate Pastor, Saint Peter’s Church, New York, N.Y.
The Reverend Jared R. Stahler, Associate Pastor, St. Peter’s Church, New York, N.Y.
The Reverend Donald Stiger, Senior Vice President for Mission and Spiritual Care, Lutheran Health Care, Brooklyn, N.Y.
Rabbi Dr. Abraham Unger, Assistant Professor and Director of Urban Programs, Department of Government and Politics & Campus Rabbi, Wagner College, Rabbi, Congregation Ahavath Israel, Staten Island, N.Y.
Rabbi Dr. Tzvi Hersh Weinreb, Executive Vice President, Emeritus, Orthodox Union
Rabbi Jeffrey Wohlberg, President, The Rabbinical Assembly

“I’m going to start with this message,” said Ronald U. Mendoza, Ph.D., (GSAS ’97) an economist for UNICEF’s division of policy and practice. “Children are at risk because of the economy. It’s that simple. This economic crisis will be suffered greatly by children and families that had nothing to do with the excesses that caused this downturn. I can’t think of a greater injustice.”

Mendoza used statistics to outline how the unprecedented decline in global economic growth is affecting the world’s poor because of the spike in oil and food prices, such as rice and wheat.

“Though the price of rice was at its highest in the middle of 2008 and has dipped somewhat, it’s still substantially above the 10-year average,” he said, adding that, for a variety of reasons, the poor are often the least equipped to weather the impact of shocks on their income.

They have few assets to sell and limited or no access to formal credit and insurance markets to help smooth income shocks. They often lack the education and marketable skills that are necessary for successful migration to areas with economic opportunities.

The global economic crisis hit children in poverty as the result of a ripple effect, Mendoza said.

“Remittances have also declined,” he added. “Studies have shown that women adjust by working longer hours. Other times, children are pulled out of school to save money for the family or to join the workforce. Sometimes, you have less nutritious food on the table or less food, period.”

This will continue to result in intergenerational transmission of poverty, Mendoza said.

UNICEF is fighting the battle against child hunger by enhancing nutrition security and working with 15 countries with signs of deteriorating situations around marginalized populations.

“You can help by just learning more about this issue,” Mendoza said.

Panelist Sophie Mitra, Ph.D., assistant professor of economics, discussed how the economic downturn affects not only children and families, but also teenagers, women, the disabled and informal and migrant workers.

“The impact of this crisis is heterogeneous in that is not restricted to the poorest. Some in the middle class are falling below the poverty line as we speak,” she said.

According to recent figures from the United Nations, the increase in the number of “extreme poor” in 2009 versus 2008 has reached astonishing numbers. In Africa, there are 11.9 million more extreme poor compared to 2008. In eastern and Southeast Asia, there are 56 million additional extreme poor than there were in 2008. In western Asia, there are .07 million more and in Latin America and the Caribbean, 3.6 million more are classified among the extreme poor.

Mitra proposed a policy response that will protect the most vulnerable.

“An increase in pro-poor spending because, in past crises, pro-poor spending has always been cut,” she said.

Mitra recommended a “bailout for the poor” that includes reforming or expanding the social safety net. This expansion/reform could include the creation of public works programs such as the one in India that guarantees informal workers at least 100 days of work per year; as well as cash transfer programs to poor households.

The third panelist at the event, Sister Ann Braudis, M.M., Ph.D., of the Maryknoll Office for Global Concerns, discussed how the economic crisis affects climate change and sustainable development.

She said using gross domestic product to measure the wealth of countries is a broken system, considering that the cleanup and everything related to a chemical spill at a Superfund in New Mexico, for example, is counted in the United States’ GDP.

“The time for a new way of counting wealth has arrived,” she said.

Sister Braudis, who has spent time working in countries such as the Philippines and Bolivia, urged attendees to conserve water, which may turn out to be the next big shortage in developing countries.

“We are a species charged with the care of our planet,” Braudis said. “The future of everything depends upon this. We have a moral sense of responsibility for the health and maintenance of the planet. The challenge we face today is to align our behaviors with our understanding.”

The panel was moderated by Monsignor Joseph G. Quinn, J.D., J.C.L., Fordham’s vice president for mission and ministry. “The fact that there are so many of you here today is a great sign of the goodness and work at Fordham,” he said.

Dale Lindquist, D.Min., associate director of the Beck Institute on Religion and Poverty, said the kickoff event placed the focus on a topic of the utmost importance.

“Poverty is a real problem in this country,” he said. “Many think we’re an affluent country, but that’s because we don’t really think in terms of the poor. The poor and the really poor are an invisible population—they just don’t exist. They are just not in the public awareness and I think having a consortium like this brings it into the awareness of the University and that is really an enormous contribution.”