Paul Cella's post Biblical Solutions is especially timely not just in light of the current recession, but also because of the publication of Pope Benedict XVI's new encyclical Caritas in Veritate. I'll have more to say about CV once I've read the whole thing. In the meantime, it would be useful to issue a little primer about how Catholic social teaching applies in today's dire circumstances.
What I've seen of CV so far is quite in line with how Catholic social teaching (see here for its official "compendium") has been developing since Leo XIII's Rerum Novarum (1891). By endorsing private property and the pursuit of profit, it is compatible with some forms of capitalism and thus needs no defense around here. But it also insists on conditioning those goods by such principles as "the universal destination of goods," "solidarity," "subsidiarity," and "the preferential option for the poor." As moral injunctions for the faithful, those principles are not terribly controversial either, at least among Christians. Most of the debate about applying Church social teaching concerns the extent to which such conditioning principles call for civil legislation and regulation, especially concerning the economy. On that question, the political (and theological) Left is generally maximalist; the political (and theological) Right is generally minimalist.
As a conservative in the American sense of the term, I come down mostly with the minimalists. Thus I believe that the principle of "subsidiarity" calls for private over public solutions when the former are feasible. From a theological standpoint, though, the question whether to be a political minimalist or a political maximalist is a matter of prudential judgment, rather than doctrine, about what's "feasible." The question is essentially empirical, and boils down to how to balance, in practice, the principle of subsidiarity with the other principles "conditioning" the goods of private property and profit. Subsidiarity is generally more popular with the Right than with the Left. But for Catholics, and a fortiori everybody else, Rome generally treats the balancing act as a matter of opinion. For the social teaching of the Church is logically compatible with a rather broad range of prudential judgments about how to implement it in the concrete.
In fact, what conservative critics of the Church's social teaching often fail to realize is that, seen as a whole, it is less palatable to the Left than to the Right. Liberal Catholics generally embrace Church teachings on, e.g., the death penalty, health care, and the treatment of immigrants, and want them enshrined in secular legislation; but on abortion, euthanasia, same-sex "marriage," and other issues called "social" in American political parlance, the song changes dramatically. True, the precise converse holds among many Catholics who are politically conservative, especially in the U.S.; but in my view, the conservatives hold the theologically stronger position. As Fr. Robert Sirico of the Acton Institute notes:
It is quite a spectacle to see Catholic progressives — who in other circumstances contort themselves into exegetical pretzels when they want to undermine clear, emphatic, authoritative, and repeated magisterial prohibitions on same-sex relations, female “priests,” and contraceptive acts — morph into virtual Ultramontanists on prudential matters such as the precise level of a minimum wage.
And the same could be said, mutatis mutandis, about many other political issues, such as whether the advantages of government-run health care would outweigh the disadvantages. As I argued in this post, the trouble with the Catholic Left is that it often presents as morally binding certain political proposals which, from Rome's standpoint, are really matters of opinion, and presents as matters of opinion certain political proposals which, again from Rome's standpoint, are morally binding. So not only is the Catholic Right's general sense about Church social teaching theologically sounder than the Left's; said teaching is more easily reconciled with American "conservatism," or at least with some strains thereof, then with American "liberalism."
But in some cases, applying the Left/Right dichotomy is simply unilluminating. The "usury crisis" Paul has described is a good example. Although people can debate from now till doomsday how much state regulation of debt instruments is wise, and probably will, it cannot be denied either (a) that some degree of regulation is necessary, and (b) that the explosion of public and private debt, all slated to be repaid with interest, has been bad for everybody. Ignoring the traditional moral strictures of the Church about debt and interest fosters a systemic greed which is eventually self-defeating. We are now in a situation where bankrupt governments are shoring up bankrupt sectors of the economy with funny money that will burden the next generation and beyond with unsustainable debt service. That wouldn't have been necessary if both the private and public sectors hadn't reduced themselves to pigs feeding at the trough. Because both private and public greed have driven this crisis, it's really not a Left/Right issue. It's a rather elementary moral issue.