At a luxurious black-tie fundraising dinner this week, Cardinal Cormac Murphy O'Connor, head of the Catholic Church in England and Wales, pronounced that capitalism had been killed by the events of Autumn 2008 just as surely as communism had been killed by the events of August 1989. He should know better.

Churchmen should not pontificate about economics. What do they know about it? As much as I know about theology, probably, which is almost nothing. What they know about economics is what they read in the papers – not the business pages, but the headlines – and hear on the BBC. Most ordinary journalists have little grasp of how the great world economy actually works, and even those that do don't have the space or the time to explain its intricacies to listeners and readers. But politicians can shout louder than any economist, so the prevailing wisdom becomes what the politicians want us to believe, not what the economists know is true.

Right now the politicians want us to believe that it is capitalism, markets, bankers and all things business that have failed. In reality it is the politicians who have failed, and who have caused this crisis. They engineered a 20-year boom built on easy money. With credit cheap, we could all afford whatever we wanted – luxury goods, cars, holidays, houses at £400,000 and beyond. It was a great party. Now we're suffering the hangover.

The good Cardinal sees and worries about this hangover – people unemployed, families in despair. But these are not the effects of capitalism. They are the effects of its perversion by governments and their wild spending with no thought for tomorrow. Meanwhile, capitalism has at last begun to pull billions of people in India and China out of abject poverty – after decades of state socialism which did nothing for them. The Cardinal should be praising capitalism, and scourging those politicians who have managed it so badly.