Okay, I have caught up on that reading now.
I apologize, by the way, for several typographical errors in that transcript; the word “of” seems to be missing in several (about 10) places.
Father Ratzinger draws some parallels between the period shortly after the Second Vatican Council and the Enlightenment period in Europe in the late 1700s. Some people sought to align the Church with ideas, fashionable then as now, like liberty, equality, reason, and progress.
There is certainly a place for these ideas, but they can be misused. A good idea can become disfigured by a too-narrow application. In the world today, our devotion to personal liberty kills millions of unborn human beings, equality means a man can say he is a woman, reason is reduced to matters which are tangible, and progress favors those who can afford it.
Anyway, getting back to Fr. Ratzinger’s speech, he is saying that the Church will become irrelevant if it turns away from the fundamentals of Christianity, most importantly faith in God who so loved us that he gave his Son so that we might have eternal life. If the Church has a social or political mission, it must be built upon and always centered on that foundation of faith, hope, and love.
In your original post, you mentioned how we treat other people who are different than us. Fr. Ratzinger would probably say that we should recognize the dignity of every human being, and treat each one as a beloved child of God. There is certainly no problem with the Church taking the fundamental principle of the dignity and worth of every human person, and applying it to today’s concerns about inequality and prejudice.