CCN PHOTO | DEBORAH GYAPONG
Economist Pierre Piché, left, and Jesuit Fr. Bill Ryan offered their views to the Canadian Conference of Catholic Bishops.
SAINTE-ADELE, QUEBEC – The world is in the midst of the worst economic crisis since the Depression and "there is no miracle cure," a Montreal-based economist told Canadian bishops Sept. 25.
Governments do not have much leeway to help those affected, though economies that are more flexible will suffer less, Pierre Piché told the Canadian Conference of Catholic Bishops (CCCB) annual plenary Sept. 25.
"There is not much choice," said Piché, an expert in international investment and advisor to the Power Corporation of Canada. "Either we suffer, or we need to adjust. We're going to suffer even if we adjust."
The crisis affects the whole world economy, especially its key engines North America, Europe and Japan, which has been experiencing a malaise since the 1990s.
"It goes really bad when you're on a plane and you have three of the four engines not working," he said.
Unemployment, he said, is increasingly structural and is composed of people who have been looking for work for a long time or have abandoned looking for work altogether.
As well, rates of growth are sluggish, and government debt is rising, he said.
Piché said fears of inflation have been replaced by fear of deflation where prices go down in a generalized manner. This explains the behaviour of central banks in trying to pump money into the economy.
"Deflation is horrible," he said. "It's very serious, because it changes the behaviour of people. When they know prices are going down, they won't spend. It creates a vicious circle."
We're facing what economist John Maynard Keynes called the "paradox of thrift," he said. While it is good for households and corporations to be thrifty, but "if nobody consumes, then nobody sells anything and everyone goes broke."
Father Bill Ryan of the Jesuit Forum for Social Faith and Justice in Toronto offered a theological reflection on the crisis, pointing out Pope Benedict calls for the logic of profit to be replaced by the logic of gift.
Ryan said, there is an "essential relationship between faith and justice and justice and evangelization." Faith and justice cannot be separated, nor can evangelization and justice.
Ryan said the secular world is coming to a "growing consensus we need a new mindset."
"Our models and tools are proving inadequate; we seem to be walking with no clear purpose."