There is, of course, little we can do to change the reality of the many uncertainties we now face as investors. In early 2010, we confront many questions, none of which we can answer with confidence. Will the tentative signs of economic stabilization evident in 2009 grow into an enduring recovery and power a return to general prosperity? Or will recovery stall with the removal of the government’s fiscal stimulus and the end to the Federal Reserve’s easy money and support of the mortgage market? Will our elected leaders be capable of crafting and instituting the reforms necessary to bring effective regulation and a general sense of fairness back to the workings of the markets? Or will the apparent rebound from the worst of the crisis combine with hard work by Wall Street’s lobbyists to gut any real reform, almost ensuring another crisis down the road?
These questions are more than academic. As SRI investors, we know our portfolios are best served by an economy that shares the benefits of prosperity broadly and fairly, one in which social justice is not just a possibility but a fundamental element of economic structures and laws. An economy that enriches Wall Street at the expense of Main Street is neither just nor sustainable. As was brutally proved in 2008, such an economy will not produce the long-term portfolio returns that we expect and that we need in order to fund our missions — no matter how high markets rise over the short term.
As Catholic SRI investors, we know that markets work best when there is a systemic recognition that the preservation and promotion of human dignity, justice, responsible stewardship, a commitment to shared prosperity and a conscious application of corporate social responsibility are at the center, not the periphery, of their workings. Yes, these principles are subject to a wide range of interpretations. Nevertheless, it is unambiguously clear that the failure to keep these essential — yet elegantly simple — ideas at the heart of economic and regulatory policy in recent years, and at the center of decision-making by many of the world’s biggest financial institutions, helped bring about the global financial crisis and contributed to its severity. We were all hurt by that failure — not only because we were forced to fulfill our missions with reduced financial resources, but because we empathize with the human suffering across society at large caused by these failures, and because they have only made our missions more challenging, especially when we serve the needs of the poor and marginalized, who inevitably suffer the most for society’s mistakes.
An economy that enriches Wall Street at the expense of Main Street is neither just nor sustainable.