According to a report published by the New York Federal Reserve Bank, college students are borrowing more than ever and debt delinquency is on the rise. Student debt almost tripled between 2004 and 2012 and is now just over $1 trillion. In fact, student debt is the only kind of household debt to rise during the Great Recession and is now second only to mortgage debt in magnitude. At the same time, for all age groups the share of borrowers who are more than 90 days delinquent on their student loan repayment has almost doubled.

Some, like Federal Reserve Chairman Ben Bernanke, claim that student debt is not inflating a higher education bubble that will cause a financial crisis, because the vast majority of student loans are backed by the U.S. government. The taxpayers are on the hook and not the banks, so banks will not be in financial distress if students default.

Bernanke’s claim is revealing. It’s clear that he thinks that the financial system is the economy. It seems that if the financial system is afloat, everything is okay. Such reasoning ignores that what helps people achieve their ends is not money per se but the actual producer and consumer goods that are produced throughout the social economy.

Alas, investment made possible by subsidized loans of newly created money contributes to an unproductive use of resources. Thus the economic problem with government-guaranteed student loans. Consider:

In the first place, it is not at all clear that the educational payoff matches the expense. According to data from the Collegiate Learning Assessment, 45 percent of students demonstrated no significant learning in their first two years of college and 36 percent demonstrated no learning in four years. According to the National Assessment of Adult Literacy, from 1992 to 2003, literacy among college graduates declined at about the same rate that enrollment grew; all the while government grants and guaranteed student loans significantly increased.

This dismal educational payoff is largely because much of increased subsidized tuition payments have been absorbed by increases in personnel. For example, in 2007, colleges utilized 13.1 percent more employees to educate the same number of students than they did in 1993. The vast majority of growth has been in administrative staff. From 1976 to 2005, the number of administrative staff per student more than doubled; from 3 per 100 students to more than 6 per 100 students. The financial effect of administrative bloat is magnified by the fact that the average mid-level and senior-level administrative salaries are noticeably higher that the average faculty salary. Between 1993 and 2007, while expenditures per student for instruction increased 39.3 percent, expenditures per student for administration increased by 61.2 percent

Making the college experience available requires using many resources—land, labor, buildings, desks, computers, energy, and all sorts of amenities. These are all resources that have alternative uses. If they are being allocated to provide education merely due to government subsidies, it is likely they would be more valued in other uses.

That student debt is fueling malinvestment is indicated by the rising debt delinquencies. Like the old gray mare, the college wage premium ain’t what she used to be. Increasing default rates prove this. What matters is not only the level of a post-college salary, but the level of that salary relative to the cost of college. As higher salaries fail to keep pace with college tuition, an increasing number of students are put at risk of not paying off their loans.

Additionally, many students who have borrowed money for college do not complete college. Six-year college completion rates at public four-year institutions have remained just below 55 percent for a decade. At the same time, the four-year rate has been stuck around 30 percent.

Colleges, universities, and their students are caught in a costly game of leap frog. The perceived need for financial aid and loans results in more government subsidies. More debt results in more demand for college schooling and consequently higher tuition. Higher tuition increases the perceived need for more debt. More student debt increases the demand for college which increases tuition price. On it goes.

The only solution is to get government out of the business of subsidizing student debt. Then, at least decisions of students to borrow and banks to lend—and colleges to set tuition—will be based on economic reality rather than the shifting sand of monetary inflation.

By now everyone knows that Sen. Mitch McConnell has called out the Internal Revenue Service for its “thuggish practices” involving intensive scrutiny and extended delays of decisions in cases where an organization included the words “tea party,” “patriot,” or “9-12” in its application for federal tax-exempt status. Apparently at McConnell’s request, the matter is now being investigated by the IRS Inspector General. The House Ways and Means Committee initiated its own investigation into the agency’s policies and practices.

Michigan Rep. Mike Rogers said publically on Sunday that the IRS had “agents who were engaged in intimidation of political groups.” He added, furthermore, “I don’t care if you’re a conservative, a liberal, a Democrat or a Republican, this should send a chill up your spine. It needs to have a full investigation.”

Indeed there will be an investigation. To grant Rogers his “full investigation,” however, will require Congress to look well beyond the tax enforcement agency’s policies related to tea party organizations. Consider:

In a move that is astounding because it so obviously chills political speech in the United States, the IRS has delayed and may deny the awarding of tax-exempt status to Z STREET because its mission and goals contradict President Obama’s Middle East policy.

When the nonprofit, educational Z STREET, a self-described Zionist-organization, applied for tax-exempt status in 2009, the IRS demanded in writing to know “Does your organization support the existence of the land of Israel?”  Where the president “strongly supports” the two-state solution, Z STREET was founded to support the state of Israel as currently recognized by the international community.

Court documents filed by Z STREET verify that the IRS maintains a special policy for organizations that are connected with Israel. The IRS informed the nonprofit organization that its application had been forwarded to “a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies.”

Z STREET should be praised for pushing back. The small organization has taken up the cause of defending itself and other organizations that may find themselves at odds with particular political beliefs of a future administration.  Z STREET’s initial hearing is scheduled for July 2 in federal district court in Washington, D.C.

What is lamentable is that any nonprofit educational or charitable organization would find itself pressured by the federal government to prove that its charitable, religious, or educational goals are not incongruent with the foreign or domestic policy agenda of a sitting president.

Perhaps the act of stepping on a piece of paper is mundane and insipid in the 21st century. When I walk across the courtyard of the college where I teach, I step on bricks that bear the names of donors, administrators, colleagues, and students. Indeed, I even step on Christian symbols. Several decades ago when I visited St. Giles Cathedral in Edinburgh, I sought the burial marker for the reformer John Knox, but I was unable to get a clear view because of the vehicle that was parked atop it.

The act of stepping on the name of Jesus, however, is historically significant. In particular I recommend Shusaku Endo’s novel, “Silence.” In this historical novel, the author depicts a missionary’s dilemma. Is it permissible for me to step on the name of Jesus, and hence symbolically denounce my faith, when my refusal to do so will cause terror, torture, and even death on local believers in the village? I highly recommend the novel; I have read it several times.

The Florida Atlantic faculty is currently suggesting that the administration’s handling of the situation has compromised the instructor’s academic freedom. On the one hand, I agree; on the other hand, I’m not convinced.

The latest news coverage indicates that the instructor is still waiting to learn whether or not his contract is being renewed. If the administration decides not to renew his contract, on the basis of this classroom exercise, the instructor deserves a full and complete hearing. Unless due process is followed, his academic freedom has been compromised.

On the other hand, however, I’m not convinced that the exercise is best depicted as a threat to academic freedom. At InsideHigherEd.com, academic freedom is defined first and foremost as relating to intellectual debate and intellectual commitments. The engagement of this exercise in class moves the activity from intellectual debate to a behavioral dilemma.

The exercise of a class of students being asked to write “Jesus” on a piece of paper and then stepping on it is a ridicule of religion to some, and indeed at least one student complained. Academic freedom does not give the instructor the right to ridicule a student’s faith. However, this exercise is larger than academic freedom. It is better discussed as an issue of civility.

The claims of Jesus are such that this exercise is not a threat to his dominion. Nevertheless, it communicates a lack of respect for others. Such lack of respect, when conveyed by an instructor, is a lack of civility. Demonstrating civility in the public arena is more critical than ever. The failure to do so will alienate students. Recent events in Boston suggest that some of our students may be living on the margin. We want them to see and experience the best of academic freedom and the liberal arts. When professors abuse their academic freedom, and ridicule (either explicitly or implicitly) the views of their students, their lack of civility is a disservice to our modern society.

A healthy classroom engages students in a rich debate of ideas. It should not encourage students to perform symbolic gestures that ridicule the beliefs of others. This instructor should apologize for his lack of civility and then continue his task of educating his students.

Maybe it’s a measure of progressives’ refusal to look back, to always move “forward.” Otherwise, they should be celebrating right now. In fact, President Obama and fellow modern progressives/liberals should be ecstatic all this year, rejoicing over the centenary of something so fundamental to their ideology, to their core goals of government, to their sense of economic and social justice—to what Obama once called “redistributive change.”

And what is this celebratory thing to the progressive mind?

It is the progressive income tax. This year it turns 100. Its permanent establishment was set forth in two historic moments: 1) an amendment to the Constitution (the 16th Amendment), ratified February 3, 1913; and 2) its signing into law by the progressive’s progressive, President Woodrow Wilson, October 3, 1913. It was a major political victory for Wilson and fellow progressives then and still today. By my math, that ought to mean a long, sustained party by today’s progressives, a period of extended thanksgiving.

President Obama once charged that “tax cuts for the wealthy” are the Republicans’ “Holy Grail.” Tax cuts form “their central economic doctrine.” Well, the federal income tax is the Democrats’ Holy Grail. For progressives/liberals, it forms their central economic doctrine.

As merely one illustration among many I could give, former DNC head Howard Dean and MSNBC host Lawrence O’Donnell were recently inveighing against Republican tax cuts. Dean extolled “what an increase in the top tax rate actually does.” He insisted: “that’s what governments do—is redistribute. The argument is not whether they should redistribute or not, the question is how much we should redistribute…. The purpose of government is to make sure that capitalism works for everybody …. It’s government’s job to redistribute.”

What Dean said is, in a few lines, a cornerstone of the modern progressive manifesto. For Dean and President Obama and allies, a federal income tax based on graduated or progressive rates embodies and enables government’s primary “job” and “purpose.” They embrace a progressive tax for the chief intention of wealth redistribution, which, in turn, allows for income leveling, income “equality,” and for government to do the myriad things that progressives ever-increasingly want government to do.

And so, in 1913, progressives struck gold. The notion of taxing income wasn’t entirely new. Such taxes existed before, albeit temporarily, at very small levels, and for national emergencies like war. The idea of a permanent tax for permanent income redistribution broke new ground. The only debate was the exact percentage of the tax. In no time, progressives learned they could never get enough.

In 1913, when the progressive income tax began (and the first 1040 form, with instructions, was only four pages long), the top rate was a mere 7 percent, applied only to the fabulously wealthy (incomes above $500,000). By the time Woodrow Wilson left office in 1921, the great progressive had hiked the upper rate to 73 percent. World War I (for America, 1917-18) had given Wilson a short-term justification, but so did Wilson’s passion for a robust “administrative state.”

Disagreeing with Wilson were the Republication administrations of Warren Harding and Calvin Coolidge, his immediate successors. Along with their Treasury secretary, Andrew Mellon, they reduced the upper rate, eventually bringing it down to 25 percent by 1925. In response, the total revenue to the federal Treasury increased significantly, from $700 million to $1 billion, and the budget was repeatedly in surplus.

Unfortunately, the rate began increasing under Herbert Hoover, who jacked the top rate to 63 percent. It soon skyrocketed to 94 percent under another legendary progressive, FDR, who, amazingly, once considered a top rate of 99.5 percent on income above $100,000 (yes, you read that right).

Appalled by this was an actor named Ronald Reagan, himself a progressive Democrat—though not much longer. Reagan often noted that Karl Marx, in his “Communist Manifesto” (1848), demanded a permanent “heavy progressive or graduated income tax.” Indeed, it’s point 2 in Marx’s 10-point program, second only to his call for “abolition of property.”

The upper tax rate wasn’t reduced substantially until 1965, when it came down to 70 percent. Alas, President Ronald Reagan took it down to 28 percent. And despite claims to the contrary, federal revenues under Reagan increased (as they did in the 1920s), rising from $600 billion to nearly $1 trillion. (The Reagan deficits were caused by excessive spending and decreased revenue from the 1981-3 recession.)

The upper rate increased again (to 31 percent) under George H.W. Bush and under Bill Clinton (39.6 percent). George W. Bush cut it to 35 percent. Barack Obama has returned it to the Clinton level of 39.6 percent.

Here in 2013, 100 years henceforth, the wealthiest Americans—the top 10 percent of which already pay over 70 percent of federal tax revenue—will be paying more in taxes this year than any time in the last 30 years. For progressives, this is justice. But it is also bittersweet: As progressives know deep inside, it still isn’t enough. For them, it’s never enough.

To that end, my enduring question for progressives is one they typically avoid answering, especially those holding elected office: In your perfect world, where, exactly, would you position the top rate? I routinely hear numbers in the 50-70 percent-plus range.

Democrats like President Obama complain about Republican “intransigence” in raising tax rates but, truth be told—and as any liberal really knows—if it wasn’t for Republican resistance, progressives would rarely, if ever, cut taxes. America would remain on a one-way upward trajectory in tax rates, just like under Woodrow Wilson and FDR, and just as it has been in its unrestrained spending for nearly 50 years. Like their refusal to cut spending (other than on defense), progressives are dragged kicking and screaming into tax cuts. They need high income taxes for the government planning and redistributing they want to do; for Obama’s sense of redistributive justice.

This year, the progressive income tax turns 100. For progressives, getting it implemented was a huge triumph. Their success in making it a permanent part of the American landscape is a more stunning achievement still.

I’ve referred to her as one of my Cold War seven: Ronald Reagan, John Paul II, Mikhail Gorbachev, Lech Walesa, Vaclav Havel, Boris Yeltsin, and Margaret Thatcher. They were the seven figures who dissolved an Evil Empire, and only Walesa and Gorbachev still remain with us.

The world dubbed her the Iron Lady, a title that duly fits. Many, however, mistake the Iron Lady moniker as referring solely to her strength in the Cold War. There was much more to it. Consider:

Margaret Thatcher is arguably the most complete British leader of the last 100 years, surpassing even Winston Churchill. Like Churchill, she was tough and successful in foreign policy, taking on and vanquishing totalitarian evil. Churchill warned the world as the Iron Curtain descended across Europe. Decades later, the world celebrated as the Iron Lady helped break the Iron Curtain.

But unlike Churchill, Margaret Thatcher had enormous domestic successes that Churchill couldn’t touch, and didn’t dare try to touch. When World War II closed, the British people booted Churchill from the prime ministership in preference of Labour leader Clement Attlee, who gave the British populace Keynesian socialism. The masses wanted their welfare state, and Attlee, equipped with promises of “change” and “forward,” gave them a fundamental transformation. In no time, Attlee’s party was spending money unlike anything Britain had ever seen, nationalizing everything under the sun, including with the progressive left’s coup de grace: government healthcare. It was a giant government binge that would bury Britain for decades.

This fundamental transformation to welfare-statism was so thorough, and so imbibed by the electorate, that when Churchill later returned to office for another term (1951-55) the World War II hero couldn’t stand up to the sacred cows of Britain’s new nanny state. By the late 1970s, the United Kingdom was smothered not only by massive government expenditures and debt but by the enormous and disastrous government unions that the Labour Party had built and nurtured.

All of this came to a crashing head in the late 1970s, and fittingly under the Labour Party, this time led by Prime Minister James Callaghan. The signature event was the Winter of Discontent (1978-79). The economy was an utter train wreck, debt-ridden and hampered by a prolonged un-recovering “recovery.” Things were made far worse by continual work stoppages by striking public-sector unions. Given that the government ran just about everything, thanks to decades of the British left nationalizing everything, there was garbage literally rotting in the streets and dead people not being buried because of striking government refuse workers and gravediggers.

Things got so bad that the British electorate was willing to elect a bona fide conservative to run their government: Margaret Thatcher. This was not some squishy moderate that we in the United States would have called a Rockefeller Republican or (today) a RINO. This was the real McCoy; the genuine article. Here was a new leader who actually understood and could articulate what was wrong with Britain—and had the courage to do something about it.

And so, Margaret Thatcher, Britain’s first-ever female prime minister, embarked upon an extraordinary run from 1979-90 that featured three consecutive electoral victories, including the landslide that brought her to power. She then proceeded to take on not just the Soviets abroad, but, at home, the powerful government unions, the Keynesian spending, the bloated cradle-to-grave welfare state, the punitive taxes, the burdensome regulations, and decades of government nationalizations/seizures. As to the latter, Thatcher began a comprehensive campaign of privatization that returned freedom, solvency, and sanity to Britain.

It was an amazing performance. You can now expect a remarkable outpouring of emotion and appreciation in Britain, much like what America saw with the death of Ronald Reagan and what the world witnessed with the passing of John Paul II, her two Cold War partners and kindred souls. And like her two great Cold War allies, she fortunately lived to see the collapse of the Soviet empire.

Lady Thatcher outlived both Reagan and John Paul II. Her health, unfortunately, had been in decline for a long time. I recall that she recorded a video eulogy for Reagan’s funeral rather than address the audience live and directly. That was 2004, almost 10 years ago.

I also recall her parting words to Ronald Reagan: “Well done, thy faithful servant.”

And now, we can second that tribute. Well done, Lady Thatcher.

Editor’s note: A version of this article first appeared at Forbes.com.

“Am I creating wealth, or am I engaging in rent-seeking behavior?” If this question would be asked during a course of business ethics at George Mason University (GMU), few would be surprised. “Rent-seeking” is a term used often in “Public Choice” economics, and GMU has been the home of an academic center with that focus. The question, however, also appears in one of the most relevant publications released by the Vatican. That indeed is a surprise.

GMU had the late Nobel Laureate James Buchanan and still has Gordon Tullock on its faculty, two great pioneers of the discipline. In 1967 Tullock wrote “The Welfare Costs of Tariffs, Monopolies, and Theft” and later, in 1974, Anne Krueger (the former chief economist of the World Bank) coined the word “rent-seeking.” As “rents” can be legitimate, I prefer to use “privilege seeking.”

Allow me to turn back the clock to three decades ago, when I received a surprising call. The Argentine Ambassador to the Vatican, Santiago de Estrada, who did not share my hardcore free-market views, asked me if I could visit with him. He was back in Buenos Aires for a short visit. As a young professor, and one of the few classical liberal professors at the Catholic University, I had started writing about the need for the Church to develop a new understanding of free enterprise.

Ambassador Estrada shared my concern. If I recall correctly, this is what he said: “I have been at meetings of the Pontifical Council for Justice and Peace. There is a sense of inefficacy; the economic teachings sometimes focus on aspirations, worthy goals, but seldom offer something more.” His legitimate concern was not the rich anthropology taught through the centuries by Christian churches, but the effort to give guidance to business and economic leaders. The aforementioned Council is in charge of that task and the one which released the document mentioning rent seeking.

It takes time for Catholic doctrine to incorporate evolving economic consensus. In 1987, John Paul II, at a major speech at ECLAC, the Latin American economic think tank of the United Nations, spoke in favor of private enterprise: “The challenge of poverty is so great that in order to overcome it, we must make the greatest possible use of private enterprise, with its potential effectiveness, its capacity to use resources efficiently, and the abundance of its energies for renewal.”

Years later, in John Paul II’s encyclical Centesimus Annus, the Church endorsed the concept of a free economy under a rule of law. In point 42 of that document the Pope wrote that: “If by ‘capitalism’ is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a ‘business economy,’ ‘market economy’ or simply ‘free economy.’”

On other occasions, John Paul II spoke very highly of the role which entrepreneurs play in society: “[T]he degree of well-being that society enjoys today would have been impossible without the dynamic figure of the entrepreneur, whose function consists in organizing human labor and the means of production in order to produce goods and services. Without any doubt, your task is the first order for society.”

Today, most of the topics dealing with economics and free enterprise are handled by the Pontifical Council for Justice and Peace. Its work is conducted in consultation with experts from different social disciplines. It organizes seminars and releases different documents. Publications from the Catholic Church have different degrees of authority, and—in this new era—statements range from encyclicals to Twitter postings.

The Pontifical Council has been releasing “Notes” and “Reflections.” One year ago, it released a 30-page booklet, “Vocation of the Business Leader: a Reflection.” No other document from the Vatican has focused so much on the role of business leaders and entrepreneurs. It is intended “to be an educational aid that speaks of the ‘vocation’ of the business men and women who act in broad and diverse business institutions.”

In this booklet, the Council acknowledges the legitimate role “of profit as an indicator that a business is functioning well. When a firm makes a profit, it generally means that the factors of production have been properly employed and corresponding human needs have been duly satisfied. A profitable business, by creating wealth and promoting prosperity, helps individuals excel and realize the common good of a society.” The document recognizes the existence of crony capitalism and corruption and regards them as violations of principled entrepreneurship. It continues the tradition that sees businesses, in the language of John Paul II, as legitimate expressions of freedom. “Business leaders have a special role to play in the unfolding of creation—they not only provide goods and services and constantly improve them through innovating and harnessing science and technology, but they also help to shape organisations [sic] which will extend this work into the future.”

The Vatican is not and should not be a center for the promotion of concrete free-market or interventionist solutions. The Church does not have “technical solutions to offer or models to present”—that is the role of lay persons. For those of us who favor a “free economy,” it helps to have outstanding economists, such as Nobel Laureate Gary Becker, as a member of the Pontifical Academy of Science. But economists of different persuasion are also part of the debate and influencing publications.

Cardinal Turkson, from Ghana, is the current head of the Council. It has Flaminia Giovanelli, in one of its leadership positions. She is one of the highest lay persons in the Vatican. Another one is Harvard University Professor Mary Ann Glendon, the first female president of the Pontifical Council of Social Science. Cardinal Turkson is familiar with the think-tank world, such as the efforts of the Institute of Economic Affairs in Ghana. Prof. Glendon knows the U.S. scene well. With the likelihood that Pope Francis will use his many pastoral charismas beyond the walls of the Vatican, I expect that each Pontifical Council, many working as think tanks and educational centers, will rise in profile. Pope Francis will take care of the faith. The economic views that come from Vatican documents will depend more and more on a fruitful dialogue between those of us in the laity, both Catholic and non-Catholics like Gary Becker, and the leadership team of each Council.

Republicans are flailing about these days, trying to rebrand themselves before the next election cycle. A certain amount of introspection and internecine debate is inevitable after suffering a stinging loss against an opponent with a dismal record. One thing the GOP needs to do to gain greater acceptance among voters is to improve their credibility by outgrowing a tiresome, unthinking opposition to any and all tax increases.

This is anything but a recommendation that Republicans “go moderate” and tack for the political center. Being to the right of 99.9 percent of Republicans on taxation, I agree that Americans are overtaxed and for decades have favored zero capital gains tax; advocated zero taxes on corporate profits; and called for a low, flat, income tax.

What bugs me now, and what should concern Republicans who worry about their image, are the recent objections raised by some Republican legislators in Michigan and Maryland to their respective governors’ proposals for higher gasoline taxes to pay for road and bridge repairs. In a fairly typical comment, Maryland state delegate Susan Krebs complained that motorists would bear the cost of the tax hike.

But why shouldn’t motorists—the users of roads—be the ones to pay for the repair and upkeep of those roads? For Republicans to take the position that someone other than motorists should subsidize road maintenance is to adopt the ethos of progressives—that people should consume the economic goods they want and then stick somebody else with the tab.

There is a different, honest, and straightforward approach that Republicans can take if they believe that motorists should not have to pay as much as their governors propose for road maintenance: They could privatize the roads and let the new owners worry about how to cover the considerable costs of providing such a valuable product to drivers.

Republicans did similar damage to their reputation with their reflexively anti-tax ideology in 2010 by assenting to Obama’s 2 percent FICA (Social Security) payroll tax reduction. The GOP may talk a lot about “saving Social Security” for future generations, but they made hypocrites of themselves by voting to reduce Social Security revenues at the very time when current revenues no longer matched payouts, and they themselves were warning about the dangers of Social Security’s long-term underfunding.

As with road repair, if Republicans believe that government should be involved in its citizens’ retirement, they should authorize the collection of sufficient revenue to pay for the commitments they legislate. Alternatively, if they rebel at covering the expenses of a particular program, they should privatize it. In the case of Social Security, privatization would not be the sham privatization proposed by George W. Bush—i.e., diverting part of Social Security withholdings into government-approved private investments. A genuine privatization would deposit payroll deductions directly into an account in the employee’s name where the federal government can’t control or spend it.

In both the recent opposition to raising taxes to pay for upcoming road repairs and in the two years of Social Security tax cuts, Republicans have made a mockery of their professed concern about fiscal responsibility and government deficits. Reducing the revenues for specific spending projects and programs without reducing the corresponding spending is a formula for increasing deficits. Too often, Republicans pick the low-hanging political fruit of tax reductions without doing the hard—and more important—work of reducing government spending. The result is that Republicans end up weakening their brand.

Democrats have an advantage. They know who they are. They are single-minded in their relentless, unapologetic desire to maximize government spending. They don’t give a hoot about deficits. They know that the more they spend, the more power and control they have. As repugnant as this mindset is to those of us who value liberty, this unwavering commitment to the ever-increasing bestowal of federal largess motivates a large number of voters to go to the polls and vote Democratic.

Republicans, by contrast, project ambivalence and insincerity. They claim to be more fiscally responsible, but show a willingness to support underfunded expenditures. They claim to believe in limited government, and then do their best to make the Democrats’ welfare/transfer state work, rather than proposing to dismantle it. The result is cognitive dissonance. How can voters be sure about what Republicans really believe, other than the importance of winning elections?

My recommendation to Republicans: Work harder to differentiate yourself from progressives and Democrats by forging a clear, unambiguous brand as the party of smaller government. If you remain the party of Big Government Lite, work less at reducing too-high government spending than at reducing too-high taxes, and are unwilling to devolve government programs to the private sector—in other words, if you persist in business as usual—you will deserve the electoral defeats you will bring upon yourselves.

With MF Global (MFG) recently disclosing more details on its bankruptcy and liquidation, let’s quickly review the financial debacle that came to fruition under former New Jersey governor, former U.S. senator, and former Goldman Sachs chairman, Jon Corzine. Moreover, let’s relate it to the current debacle in Cyprus. There are some quite troubling similarities.

MFG was a small commodity broker, a marginal operation by many standards or metrics; then along came Jon Corzine. He was looking for a new opportunity to make more money than he already had—which was substantial to begin with. So he was offered a chance to expand the MFG business model by setting up an in-house, proprietary securities trading operation.

To make a long story short, he massively overleveraged the company’s capital base by borrowing money to buy high-yield Italian and Greek sovereign debt on the theory that Italy and Greece would always be good for the principle and interest. However, the secondary market value for the bonds he bought collapsed, and MFG was hit with a massive margin call. (MFG would have to put up more cash, margin, in order to continue to hold the bond position, so as to avoid being forced to sell the bonds in the trading account and book a loss that would, in turn, bankrupt MFG.) So, what to do?

Mr. Corzine went to all of his friends on Wall Street, hat in hand, and asked for additional short-term financing in order to forgo the day of reckoning. But no additional cash was forthcoming. Then, somehow, over one billion dollars’ worth of segregated customer cash from the commodity brokerage side of MFG found its way into the proprietary speculative trading arm of MFG in order to “temporarily” meet the margin call. This was simply sending good money after bad and—in short order—that “temporary” cash was lost as the bond position deteriorated further and forced the bankruptcy of MF Global.

Segregated customer money should be just that, segregated. It is meant to be kept separate from all other parts of MFG’s operations.

Segregated money belongs to the customers; it’s their property. The taking of this cash was a theft. Many in the financial community saw what happened at MFG as more than appalling. The act shattered a more-than-century-old trust that had stood the test of time. Customer cash was to be segregated capital, never to be touched by anyone other than the customer—ever.

Now comes along the banking crisis in Cyprus.

The banking system in Cyprus is very small by international standards, but the country’s two large banks are both essentially bankrupt. In order to avoid collapse, they need a capital infusion. They need cash now. So, what to do?

Being a member of the European Union, Cyprus turned to the Euro Finance Ministers and what is known as the Troika, which is the European Central Bank (ECB), International Monetary Fund (IMF), and the European Commission (EC). These institutions represent the financial fire brigade for the EU. Since the Cypriot banks already have worthless equity and minimal long-term senior debt, the only thing left of value would be the customer deposits at the banks. The financial fire brigade knew this and decided to impose a condition on the Cypriot government in order to gain access to any capital infusion for the banks. The condition is that the Cypriot government had to steal depositors’ money. Oh, they called it a onetime “emergency tax” or a “levy”—but it would be the taking of private property by the government no matter what it’s officially called.

Of course, some may argue that government does this all the time via the tax or levy. They do in a sense, but the difference this time is the sanctioning of the theft by the financial fire brigade on the depositors of a bank. This legal plunder is new. This is like a onetime wealth tax on bank depositors. It’s a confiscation of property—thievery—pure and simple. The significance of the act is the shattering of trust and the precedent it sets.

As of the moment of this writing, the Cypriot parliament rejected the initial call to enact the “tax” on depositors in some form or another, but the fundamental point still stands: trust and precedent have been respectively shattered and set.

The example of MF Global and the Cypriot bank bailouts are small potatoes, given the amounts of money involved. Nevertheless, how these bailouts affect the confidence and trust in the global financial system cannot be underestimated.

In the case of MF Global, nobody went to jail. They should have. In fact, a lot of people probably should be in jail. In the case of the Cypriot bank bailout, the government revealed a similar level of fraudulent intent by entertaining the idea of potentially sanctioning the theft of depositors’ cash—which would be a daylight drive-by robbery where no one is going to go to jail.

So, what does all of this say about the modern global financial system? If you are thinking it is corrupt and rotten to the core, you are correct.

Having spent most of his life in Buenos Aires, Pope Francis has given proof that he can rise above his environment. As his compatriot Bishop Alberto Bochatey remarked, “he is a man of few words.” I lived half of my life in Buenos Aires. Few things are more difficult there than finding leaders with his humble demeanor and his preference of teaching by example. Most in his native Argentina have been captured by a political and economic environment ruled by a government dominated “social justice” mentality. Hopefully, Pope Francis will also rise above his culture and help recover a different type of social justice, which was nurtured and developed by members of his religious order.

From the moment that the term “social justice” became a mandatory term in the lingo of Argentine politicians, the country went down the hill. This was during the mid-1940s, when Col. Juan Domingo Perón created the “Justicialista” or the “Justice” party. Perón, an admirer of Benito Mussolini, was following his recommendation: in each country where it would be adopted, fascism will need a new name. The Latin word “fasces,” came from one of the symbols used by Romans to refer to justice. The fasces were the axes carried by magistrates as a symbol of government authority and its ability to punish and execute justice. Perón made social “justice” a key pillar of his policies.

The term, however, was not created then. Nobel Laureate F.A. Hayek was correct in pointing out that the term became widely used after a noted Jesuit, Luigi Taparelli d’Azeglio (1793-1862), used it in what was the most important Natural Law treatise during the 19th century in the Latin language world.

Taparelli’s book was translated into Spanish and French, but never into English. Perhaps that explains why Hayek made a mistake by implying that Taparelli used the term in the same corrupted, but popular, interpretation that sees social justice as “taking from the rich and giving to the poor.” As Thomas Patrick Burke has noted in a recent article and book, Taparelli belonged to a rich tradition where social justice has little or nothing to do with redistribution by government. It has more to do with order in society and with the justice that goes beyond courtroom justice.

Even his opposing intellectual giants, like Father Antonio Rosmini Serbati (1797-1855), had similar views on this topic. Rosmini’s daring views were condemned for some time. His cause for beatification was started by John Paul II, and he was the first person beatified by Pope Benedict. Rosmini wrote “The Constitution Under Social Justice.” Published recently by the Acton Institute, it carries an outstanding introduction by the translator Alberto Mingardi. Mingardi, founder of the Bruno Leoni Institute, wrote that “Rosmini openly criticized redistributive policies, which limit and seize private property in the name of compulsory benevolence.”

During the period that goes from Aristotle to Adam Smith, there is an abundance of moral philosophers and jurists who have focused on distributive justice. It is almost impossible to find one who equates it with “Peronist social justice.” Wages, profits, and rents were always parts of commutative justice, or contract law. Distributive justice dealt with taxation, rewards, and honors. Even those who had a warm heart for the poor, such as the Jesuit Juan de Mariana (1536-1624), argued that equality before the law required some inequality, as it was just that the most productive should earn more. Mariana was a scholar and his copious writings made him into a one-man think tank. His works were known to Thomas Jefferson and James Madison. A small but effective think tank analyzing and promoting free enterprise, now carries his name in Spain, the Instituto Juan de Mariana.

Unfortunately it is not only Hayek, but even current outstanding intellectuals, and even Jesuits, who seldom mention this tradition. The approach to social justice of other noted Jesuit intellectuals who had great influence on Church doctrine are also different from today’s redistributive interpretation. Mateo Liberatore (1810-’92), a great champion of private property, played an important role if the drafting of the first great Social Encyclical, Rerum Novarum (1891), he reminded readers that: “in this topic of rights we must diligently guard against giving too much authority (potestà) to the state.”

Another Jesuit, Oswald Nell-Breuning (1890-1991), who played a role similar to Liberatore in the drafting of Quadragesimo Anno (1931), is sometimes accused of sharing a corporatist view of society. Nevertheless, he wrote that it is against social justice to fix salaries that are above the level that make business viable. When was the last time a reader of this column heard a priest or pastor from the pulpit arguing that high workers’ salaries can go against social justice?

I do not know if Pope Francis has studied or pondered the work of the above and other outstanding Jesuit intellectuals. Jesuits writing in recent decades have also presented economic views which have little to do with a Peronist interpretation of social justice. The recently departed James Sadowksy, SJ, of Fordham University, made important contributions to economics and opened the eyes of many libertarian thinkers to Natural Law. Chief among those influenced was the late Murray Rothbard, a co-founder of the Cato Institute and later of the Mises Institute. The recently retired James V. Schall, SJ, of Georgetown University, has also made major contributions. His, “Religion, Wealth, and Poverty,” published several decades ago by The Fraser Institute in Canada, is a classic among those who are inspired by religion and economic liberties.

Social justice is and will continue to be part of Catholic doctrine. The issue is addressed, among other places, in points 410-414 of the Compendium of the Catechism of the Catholic Church. Society ensures social justice when it respects the dignity and the rights of the person as the proper end of society itself. The role of government and civil society is to provide the “conditions that allow associations and individuals what is their due.” It recognizes that some inequalities are not unjust and “enter into the plan of God, but there are also inequalities that result from sin, and structures and institutions which increase perverse incentives.” According to the doctrine, solidarity is manifested in first place by a just distribution of goods, fair remuneration for work, and a zeal for a more just social order. Solidarity does not rule out opposition to government policies. Karol Wojtyla, before becoming Pope John Paul II, wrote that opposing public education can be an act of solidarity.

Given the popularity of the term, and its dangerous appearance in U.S. economic and academic debates, champions of freedom, intellectual entrepreneurs, and scholars should focus more on social justice. The Philadelphia Society, which is celebrating its 50^th anniversary this year, will devote its annual meeting in early April to study this topic. This society has tried to stay above the many divisions in the conservative libertarian movement. It was a place where libertarian economist Milton Friedman, conservative icon Russell Kirk, and in-between “fusionist” Frank Meyer, could share a panel and influence the program. It still is. Followers and new scholars from those same conservative libertarian traditions will be part of the discussions. A good example is Professor John Tomasi, the founding director of Brown University Political Theory Project. Tomasi devoted a chapter of his book “Free Market Fairness” to social justice, with the provocative title: “Social Justicitis.”

The late William H. Hutt, an economist with impeccable free-market credentials, wrote that “however woolly the notion is in the mind of the majority who use it, [social justice] can have meaning when one considers the world as it is … in fact, Hayek himself enunciates, very briefly, what we regard and describe as “the true principle of social justice,” a concept which if it were understood could be universally accepted as such.” Pope Francis has a chance to renew the old tradition of social justice and, in this way, move the focus from redistribution to the building of an orderly framework of society that is effective in lifting the poor. Respecting private property, promoting sound money, combating corruption, weeding out crony capitalism, protectionism, and other causes of unjust inequalities, which especially affect the poor, is a path to a truly liberated and more just society.

The gushing, almost angelic praise for Hugo Chavez by the left in America and around the world has been shocking to behold, but hardly surprising. I will not bother repeating the litany here. Rather, I’d like to focus on another surreal aspect of Chavez’s death—namely, the rush to preserve and display his body, so the faithful may pilgrimage and pay homage for decades to come.

Here again, I’m sadly not surprised. The far left has never been shy about venerating its heroes. This is supremely ironic, given that many of the subjects of veneration, as well as those doing the venerating, were not merely agnostics and atheists but militantly so. Recent examples include Asian communists Mao Tse-Tung and Ho Chi Minh, but the best example remains Vladimir Lenin.

Upon his death in January 1924, Lenin’s body was embalmed and preserved in a tomb, actually a shrine, in Red Square, whereby the faithful could forever honor the Great One. Etched in the marble holding the Bolshevik godfather’s body is this inscription: “Lenin: The Savior of the World.”

For an atheist state angrily committed to a war on religion, this would seem odd. In fact, however, it is precisely what we came to expect from communist regimes. In short order after Lenin’s death, poems and songs were written in praise of the “eternal” Lenin who “is always with us.” Yuri Gagarin, the first Soviet cosmonaut, visited Lenin’s mausoleum immediately before his flight so he could meditate over Lenin’s rotting flesh and draw strength for his mission. Later, Gagarin returned to the sacred site to report to Lenin on his mission.

The “Leninization” of the Soviet state’s spiritual life quickly took flight. Throughout the USSR, “Lenin Corners” were established, modeled on the Icon Corners of the Russian Orthodox Church. These mini-shrines included icon-like paintings of Lenin along with his words and writings.

A “secular religion” was established, one that, as noted by Dmitri Volkogonov, Lenin’s biographer, demanded “unquestioning obedience” from its disciples. So certain was the Party of Lenin’s infallibility that in 1925, one year after his death, the Politburo established a special laboratory to remove, dissect, and study Lenin’s inactive brain. The purpose, said Volkogonov, was to show the world that the man’s great, infallible ideas had been hatched from an almost supernatural mind.

This nonsense (if not blasphemy) continued for decades. Just ask any former Soviet citizen who suffered through the extended nightmare. A Ukrainian citizen, Olena Doviskaya, once told me: “Everywhere you went, there were statues everywhere of Lenin. They wanted you to worship Lenin.”

Most curious about this Lenin reverence and mysticism is the fact that Lenin himself considered any worship of a divinity an outrage. Lenin blasted the notion of “god-building.” He thought the most horribly unimaginable things about religion, calling religion “abominable” and “a necrophilia.” A vicious, hateful man, Lenin might have hastily shot those responsible for deifying him.

Nonetheless, communists and certain elements of the far left have engaged in such behavior for a long time, readily placing their faith in (leftist) men and replacing traditional religion—Christianity, Judaism, Buddhism, Islam, etc.—with a Marxism or socialism that they essentially treat as a religion. Brian Lowe of the University of Virginia notes that in the Soviet system, Marx was the Messiah, the Party was the Church, the Proletariat was the Elect, the Revolution was the Second Coming, and more. The Communist Manifesto was accorded a level of sanctity approaching Holy Scripture. Marx and Lenin and Stalin were deemed other-worldly.

All of which brings me back to Hugo Chavez and his enshrinement—and its paradoxes.

Chavez comes from a Roman Catholic country, whereas Lenin came from a Russian Orthodox country. In both the Roman Catholic and Russian Orthodox traditions, suspected saints—people who lived uniquely holy lives—have been placed in special tombs for purposes of veneration and to see if their dead body is ultimately incorruptible, divinely protected on earth even in death.

The Bolsheviks turned this upside down. They created atheist museums where dead priests/saints were displayed with worm-holes and other decay. They attempted to pose this in contrast to Lenin’s incorruptibility, even as the jaundiced Lenin consistently required removal and re-embalming and re-waxing.

And so, is the left currently in the process of enshrining Hugo Chavez’s body as a form of saintly veneration? Will he become a symbol of the left’s sacred cows of collectivism, wealth redistribution, and nationalization?

Don’t ever let anyone tell you that secular/atheistic progressives and socialists don’t have saints and martyrs. They’re every bit as faithful as the most Bible-thumping fundamentalist. And with the death and preservation of Hugo Chavez, they might be preparing themselves a new saint.