Editorials
Contents Volume CXI, Number 13 Correspondence Editorials 386 387 Take my wife, please: Robert H. Bell 389 An era of emergence: Abigail McCarthy Can we know spiritual reality? Donald...
...With this issue she formally assumes the post of Production Editor...
...Catholic and Salt...
...My support for Mondale began to slip...
...The sums are simply too astronomi- cal...
...How it will end, no one knows...
...ii r THIRD-WORLD DEBTORS' PRISON I l V I II I I N 1981 it was Brazil...
...Telephone: (212) MU 3-2042...
...Between 1970-79, one of the fastest growing sectors of the U.S...
...POSTMASTER: Send address changes to Commonweal, 232 Madison Ave., New York, N.Y...
...But rewarding the willing and able with better terms --as the bankers have done for Mexico and Brazil -- still leaves the toughest cases to the worst outcomes...
...He is a former Managing Editor and Associate Editor at the Catholic Worker...
...it shifted from long-term, fixed-rate loans from other governments or international agencies to short-term, variable rate loans from the commercial banks...
...Elev- en Latin nations, holding their own economic summit at Car- tagena, Colombia, want interest rates "capped," penalties for late payment eliminated, and the time for repayment extended...
...Martin Mayer, certainly no radical student of the banking industry, is only the latest to insist on the banks' responsibility for knowingly pushing questionable loans --and their obligation now, to bear a good bit of the burden...
...An additional $4,000 has been given in smaller contribu- tions...
...Who are not, understandably, eager to pick up such a vast check, especially for the banks...
...Then Brazil again, and then Argentina a couple of times running...
...This means jobs, one out of every twenty in U.S...
...When she was Second Lady she was a big booster of the National Endowment for the Arts...
...According to the Economist, one respectable study estimates that "over one third of the $252 billion increase in the debt of Argentina, Brazil, Chile, Mexico, and Venezuela between 1974 and 1982 went into buying assets overseas or was salted away in foreign bank accounts...
...I t' ' I~!!1~ !unlmnnnm...
...Collectively, LDCs in 1980 purchased 38 percetlt of the total of U.S...
...and other industrial nations...
...Single copy, $1.25...
...We have received or been pledged a total of more than $10,000 by 180 new Commonweal Associ- ates...
...Contents Volume CXI, Number 13 Correspondence Editorials 386 387 Take my wife, please: Robert H. Bell 389 An era of emergence: Abigail McCarthy Can we know spiritual reality...
...Joining the staff at this time are two Assistant Editors, Karen Smith and Patrick Jordan...
...But much of the money was also used unwisely, or spent on arms, or siphoned off illegally, or channeled toward covering the high cost of oil imports...
...bank...
...Various proposals have been made to relieve the jam...
...How the problem began is by now well known --easy loans on easy terms in the seventies, made possible by a flood of petrodollars from OPEC and Eurodollars from American balance-of-payments deficits...
...I have to admit that I got all excited about Gary Hart for a week back in the winter...
...Others recommend schemes for increasing International Monetary Fund reserves and providing the debtor govern- ments with special drawing rights so that third-world countries could maintain interest payments while commercial banks, biting the bullet, gradually write off the debts over time...
...Not long ago, Brazilians hit with austerity measures required by debt obligations looted food markets...
...The third-world leaders who contracted these loans...
...banks have lent the equiva- lent of a staggering 250 percent of their capital and reserves to the third world, $350 billion of it to Latin America and $290 billion of that to Brazil, Argentina, and Mexico...
...Gridlock...
...Patrick Jordan's name may already be familiar as the author of two lead reviews and a number of shorter ones over the past year...
...Election '84 TAKE MY WIFE, PLEASE DID WALTER MONDALE CALL...
...economy, at an annual rate of 27 percent, was trade with the third world...
...It goes to show that there are a lot of talented people working quietly all over the place...
...The eye cannot say to the hand, 'I do not need you' " (I Cor 12:21...
...Progress is being made on another front as well...
...We welcome them both to Commonweal...
...manufacturing, one out of five in agriculture...
...II...
...In 1982 it was Poland, then Mexico...
...If, as some predict, the second quarter of 1985 sees the prime rate at 16.5 percent, the recovery will strip away with one hand anything it offers the debtor nations with the other...
...He's too old and he calls his wife Mommy, even when his kids aren't in the room...
...Anne Robertson, a veteran of twenty-four years on the magazine has long exercised a wide range of responsibilities in regard both to our review section and the journal's production...
...11111...
...Ability to pay and willingness to do so are mixed together in a complex brew of economic and political factors...
...Will this be the time that failure to meet a payment brings the whole interlocked financial system crashing down ? The curtain has just closed on another episode --Argentina starring once more --and the answer, again, is "no...
...Yearly subscriptions, U.S., $24...
...exports...
...He's married to the kind of woman I admire...
...And the prospect of major defaults --or even the kind of debtors' cartel, which some saw presaged in the Cartagena meeting --could put the entire international bankung system in jeopardy...
...To all of these supporters, we send heartfelt thanks...
...That means the taxpayers of the U.S...
...What about the bankers --and their shareholders and de- positors...
...That's when it occurred to me that Walter Mondale should consider my wife for the position...
...But neither the rich nor the leaders of Latin America can make good its debt now, nor can they be held responsible for events like the world slump, the drop in commodity prices, and high U.S...
...Yes, the debt crisis resembles gridlock...
...Relief for those least able (or willing) to pay hardly encourages those more able (or willing...
...Pushed by competition, by the desire to make balance sheets look good regardless of long-range prospects for repayment, and by confidence that, as Walter Wriston of Citibank put it, "Countries can't go bank- rupt," bankers lent rashly...
...And these are only minute surface indications of the everyday loss and desolation that austerity measures have brought to Latin America's poor...
...It's as if, though many, we partake of one loaf...
...A Rubik's Cube, where moving one segment of the puzzle always seems to misalign another piece elsewhere...
...Karl Leichtman, has offered to print one issue free --a very sizable donation...
...Can we really imagine indenturing generations of poor people to the task of servicing a debt that can never be repaid, that is, in principle, everlasting...
...Disaster is occurring right now...
...dollars by International Money Or- der or by check on a U.S...
...Paul's...
...foreign, $29...
...In turn, one fourth of manufactured imports now come from LDCs, and though this has meant a loss of U.S...
...Argentina's Presi- dent Radl Alfonsin knows he cannot cement a fragile coalition for democracy in place by making it the bestower of hard times...
...The real living standard of Brazil and Mexico has declined fifteen percent in the last three years, and in other Latin nations it's worse...
...10016...
...Catch-22...
...So I was an early Mondale supporter...
...Candid observers, like Harold Lever writing in the June 28 New York Review of Books, doubt that the principal of these loans will ever be paid back...
...A further reality is that all schemes to forgive a portion of the debt one way or another encounter the fact that not all debtor nations are in the same straits...
...Readers have been responding promptly and generously to our recent letter concerning funds...
...lllllll', . I...
...And aid has come from another source: our printer, Mr...
...Analogies to the Chrysler salvage are perhaps in order...
...and other developed nations...
...Proposals to cap the debtor nations' interest rates have the merit of decoupling their obligations from the measures Mr...
...For the poor in these debtor nations it's a question of the flow of food, fuel, jobs, and medical services...
...PROGRESS REPORT It is a pleasure to announce a number of changes in Commonweal's editorial staff...
...I 'M a little surprised that Walter Mondale hasn't yet invited my wife to discuss the vice-presidency...
...Special two-year rate: U.S., $43...
...She's smart as a whip, hard-working, pleasant to deal with, and would be an asset on any ticket...
...The international debt crisis has turned into a "Perils of Pauline," with a half dozen countries alternating in the leading role and bringing the world audience repeatedly to the edge of its seats...
...Indeed, even talking about possible solutions may start banks and governments jockeying for a ball-out of some sort...
...On that question President Reagan flunks...
...I also liked the way Walter Mondale begged out of a previous presidential campaign on the grounds that he didn't like rubber chicken banquets and the decor of Holiday Inns...
...We urge everyone who has considered making a contribution, large or small, to join with these other generous friends --and with our new editors --in advancing the work Commonweal has been doing for six decades...
...Everyone involved is tempted to play "chicken," threatening a suicidal smash-up of the whole system unless someone else gives way...
...Karen Smith, a June recipient of a Master's degree from the Harvard Divinity School (and the holder of another Master's from Notre Dame), has edited several newsletters and published articles, most recently, in U.S...
...jobs in stagnant sectors of our economy, the benefits to the average consumer are considerable, estimated at a saving of $2 billion a year...
...All Canadian and foreign subscriptions must be paid in U.S...
...interest rates...
...Canada, $26...
...Canada, $47...
...But in other respects it's also an anatomy lesson like St...
...I know for sure that she has been for Walter Mondale through thick and thin, even when I stayed with him only through thin...
...But disaster is not being warded off by the makeshift arrangements that keep squeezing out as much interest as can be paid without quite tipping these countries 13 July 1984:387 over into financial or political chaos...
...He seems to be making a thorough search, including interviews with people I've never heard of...
...But if, as some propose, the difference between the "capped" rate of interest and the going rate is simply added onto the third world's principal, that merely underlines the endlessness of the problem...
...Outside the Reagan administration, however, which continues to whistle a happy tune about the disconnection between astronomical deficits and escalating interest rates, hardly anyone thinks such a beast is possible...
...My most important consideration is how much the candidate reminds me of myself...
...Much of this money supported genuine development --contributing, for example, to Latin America's impressive six percent annual growth during the decade...
...More recent riots in the Dominican Republic took fifty-five lives...
...That is the focus of all the recurrent crises...
...The fact that I never heard of Geraldine Ferraro doesn't mean that she might not make a heck of a fine Veep...
...This interconnected world is a new scene, and will take all our ingenuity to adjust to...
...prime rate adds $4 billion to the annual third-world debt...
...We should be clear about one thing...
...Religion, Literature, and the Arts, is published biweekly, except monthly Christmas-New Year's and July and August, by Commonweal Foundation, 232 Madison Ave., New York, N.Y...
...An increase of a single percentage point in the U.S...
...The political cost is similarly significant...
...So, all right, full repayment is unlikely to happen --certainly not soon, probably not ever...
...All these proposals face similar difficulties...
...The Conti- nental Illinois case has showed just how vulnerable such "nonperforming loans" can make the banks...
...Donald Evans The political philosophy of sleaze: J. Patrick Dobel 390 392 396 The Oxford legacy: David B. Noble The 'Mary Rose': Robert T. Egan Easing the conscience: Gordon C. Zahn 399 401 402 Stage: Gerald Weales Art: Nicolaus Mills 404 405 Books The Peaceable Kingdom: John T. Pawlikowski 407 Writing in a State of Siege/ Life & Times of Michael K: Alberto Manguel Order Out of Chaos: David Burns 4O9 411 Staff Editor: Peter Steinfels Assistant Editors: David Toolan, Karen Smith, Patrick Jordan Production Editor: Anne Robertson Columnists: John Garvey, J. Bryan Hehir, Abigail McCarthy Poetry: Rosemary Deen, Marie Ponsot Staff: Karen F. Silva, Harriette Balsky, Sbeila Tanksley Advertising Manager: Ruth E. Taylor Publisher: Edward S. SkiUin Commonweal, [ISSN 0010-3330] A Review of Public Affairs...
...This uncertainty about who should pay, and how much, is the root problem, but not the only one...
...Enter government, and primarily America's --with guaran- tees, subsidized interest rates, new loans...
...The bankers don't say this out loud...
...Certainly some of them misused funds or channeled them into Swiss banks...
...and, as Lever points out, not only are the third-world nations unlikely to increase exports and reduce imports to the extent needed to create the surplus required for repayment, but if they did so, it would provoke massive dislocation in the economies of the U.S...
...The one real answer, of course, to this economic Rubik's Commonweal: 388 Cube is a sustained world economic recovery --without high interest rates...
...Besides the comparison to old-fashioned melodrama, a variety of images suggest themselves for the current debt crisis...
...Then I noticed on a couple of news clips that Walter Mondale seemed lackluster...
...Fearing more riots, the Dominican government, one of the region's more democratic ones, felt compelled to buttress its bargaining with the IMF with sweeping arrests of suspect leftists...
...Still, it is also true that by swiftly recycling all those petrodol- lars, the banks performed an important service for the world economy...
...I hope my candor doesn't hurt her chances with Walter Mondale...
...Creditor and debtor governments will have to settle on both short-term relief and, equally important, a long-range write-off that, however approximately fair, gives the third world a definite finish line...
...I began to worry that Walter Mondale wasn't as 13 July 1984:389...
...In terms of immediate suffer- ing, political stability, and long-term economic development, the situation is preposterous...
...Then came the one-two punch: a quadrupling of interest rates between 1978 and 1983 and a lingering world economic slump bringing a sharp drop, for Latin countries, in commodity prices...
...0016...
...I was really bored by Ford, and I became awfully bored by Jimmy Carter...
...He tends to drone, while the circles under his eyes appear darker and deeper...
...Volcker takes to keep the economic recovery from setting off a new round of inflation...
...The audience will probably relax a bit now --which would be a bad mistake...
...The natural alternative was Walter Mondale...
...This would not be a give-away...
...Third-world and Latin American debt, in particular, not only ballooned...
...That's how it began...
...And in any case the very overexposure of the banks creates an effective obstacle to letting them ride out the crisis on their own: the nine largest U.S...
...What is at stake is more than the flow of funds and guarantees...
...Keep- ing Commonweal alive and vigorous seems to be a matter of banding together many Davids in a world of Goliaths...
...Behind each of them lurks the fundamental question: who should pay...
...I usually don't get too excited about issues and platforms and policies...
...They simply want to get as much as possible in terms of interest before the write-off of principal occurs, as it inevitably will even though no one knows quite how...
...v ", m m ~ 'Jtal'ov, .9...
...Then there is, quite literally, the flow of blood...
...Thanks to her, citizens in out-of-the-way places get federally subsidized art...
...Last week our community theater put on a play about the invention of the Dewey Decimal System...
...foreign, $53...
...This has happened before, a slippage of support as I became bored...
...the most recent half point jump added $800 million to Brazil's bill alone...
...Leaving the problem to the bankers or just waiting, Micawber-like, for something to turn up will not do...
Vol. 111 • July 1984 • No. 13
